As the first quarter comes to a close, Bitcoin (BTC) is struggling with a 13% decline, facing renewed macroeconomic uncertainty. There’s a real possibility BTC could dip below $80,000 due to the negative impact of new US trade tariffs on risk-sensitive assets. Attention among crypto traders is keenly focused on April 2, referred to as “Liberation Day” by President Donald Trump, while gold prices are climbing.
In the midst of challenging conditions, Bitcoin has experienced a relatively stable March; however, Q1 could turn out to be its worst in seven years. Indicators suggest a potential bull market pullback without a clear bottom in sight. On a positive note, the Coinbase Premium seems to maintain its strength during this price decline, indicating that panic sellers may have already left the market.
Bitcoin’s current trend appears to be characterized by a “bearish engulfing” pattern, causing traders to feel anxious as the US trade tariffs coincide with the closing of monthly and quarterly candles. This combination has raised concerns about market volatility, with BTC inching closer to the $80,000 mark. Data confirms that recent price action reached around $81,200 during the March 30 weekly close.
Responding to the recent dip, a well-known trader noted the new downward wick on the price charts, indicating a high likelihood of it being resolved soon. Another trader pointed out the emergence of a bearish engulfing candle on the weekly chart, expressing hope for clarity in the ensuing market dynamics.
From a broader perspective, unless there’s an improvement in the risk-asset landscape, Bitcoin’s and US stocks’ outlook appears bleak. Warning about potential “death crosses” on the horizon, one trading resource highlighted the need for caution as short-term price declines align with broader trends.
Examination of exchange order book data reveals that liquidity is tightly restricted around current prices. In this context, traders are closely watching the interaction between the 50-day and 50-week exponential moving averages (EMAs), which historically precedes significant moves in price. Multiple retests of this bull market support level are also common.
As discussions surrounding US tariffs loom, significant employment data and Federal Reserve updates are set to unfold this week. Key metrics related to job openings, claims, and payroll numbers will start to release on April 2, but they may be overshadowed by the new trade tariffs also taking effect on that day. The tariffs are expected to affect approximately $1.5 trillion of US imports, marking a major escalation in the ongoing trade conflict, leading to heightened market volatility.
Uncertainty levels, reflected in the Economic Policy Uncertainty Index, remain unusually high, prompting a “wait and see” posture from market observers. On April 4, Fed Chair Powell will address the economic outlook at a major conference, and previous comments indicate he is cautious about interest rate cuts.
Looking ahead, Bitcoin’s performance as Q1 wraps up is certainly lackluster. Presently, BTC/USD is down 12.7% for the quarter, marking the worst first quarter since 2018. With gold continuing to outperform as a safer investment, Bitcoin’s price has corrected significantly from earlier highs.
Despite the current downturn, historical comparisons show that such corrections are not unprecedented. Analysis indicates that prior bull markets have experienced maximum drawdowns exceeding 60%. Observers believe that despite the ongoing price struggles, Bitcoin has managed to navigate the macroeconomic chaos relatively well.
Trading metrics such as the market value to realized value (MVRV) ratio signal caution as they approach a long-term average. Previous instances of death crosses for this metric have preceded price declines after local peaks, emphasizing the need for vigilance among traders regarding potential risks.
On a brighter note, the Coinbase Premium’s resurgence has been slow this quarter due to recent panic selling, but its stability amidst ongoing price pressures suggests a possibility of positive sentiment among US investors, which is often essential for sustained Bitcoin bull markets.
This content is presented for informational purposes only and should not be interpreted as investment advice. All investment and trading activities carry risks, and individuals should conduct their own thorough research before making any decisions.