Bitcoin (BTC) is currently experiencing a tumultuous period as it seeks to confront multimonth lows during trading sessions on March 10. This downturn has accompanied a destabilizing beginning to trading on Wall Street. According to data from Cointelegraph Markets Pro and TradingView, BTC/USD fell approximately 4% on that day, reaching a low of $79,170 on the Bitstamp exchange.
Price Trends Near Four-Month Lows
The ongoing weakness is indicative of a broader trend, as risk assets have seen a flight to safety amidst volatile economic conditions. Major indices, including the S&P 500 and Nasdaq Composite Index, suffered significant losses, falling by 2% and 3.5%, respectively. Analysts at The Kobeissi Letter attributed part of this decline to anticipated government spending cuts initiated by the Department of Government Efficiency (DOGE). They emphasized that while many focus on the trade war, the ramifications of reduced government expenditure are critical to consider.
“Government spending and job growth have been ‘fueling’ the economy. DOGE’s cuts will be felt.”
S&P 500 1-day chart. Source: Cointelegraph/TradingView
As a result, the overall crypto market has seen a staggering $1 trillion erased from its market capitalization within just two months. The market rally that ensued following announcements about the U.S. Strategic Reserve has now completely receded.
Market sentiment is mixed as traders remain uncertain about the potential for Bitcoin to establish a more definitive support level. Prominent analyst Rekt Capital suggested observing rising relative strength index (RSI) values against declining prices for signs of a reversal, advising that Bitcoin might find bullish divergence under such circumstances.
BTC/USD 1-day chart with RSI data. Source: Rekt Capital/X
As of now, the daily RSI sits at 33.2, indicating that market participants are closely monitoring potential reversal metrics. Analysts note that previous bullish cycles saw upward movements whenever the daily RSI fell below 28, suggesting profitability might return to the market under similar conditions.
Addressing the Bybit Hack’s Impact
In analyzing the broader landscape of the crypto market, trading firm QCP Capital has pointed to the aftermath of last month’s hack on the Bybit exchange as a significant driver of negative sentiment. The latest reports suggest that the fear generated from potential supply increases stemming from the hack is driving traders to preemptively sell off their assets.
“Today’s price selloff may also be exacerbated by holders preemptively front-running further hacker-driven supply, now that the hackers have shown willingness to cash out rather than risk further losses.”
Market expectations remain cautious, with optimism anticipated to resurface only in Q3 at the earliest. Until then, analysts expect an increased correlation between Bitcoin and traditional equities, particularly in light of upcoming macroeconomic data releases from the U.S.
“Both risk assets are currently trading near their recent lows, and with tariff risks still looming, volatility could pick up heading into key U.S. macro data releases like CPI and PPI.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
