Bitcoin has dropped 24% from its all-time high of $109,114 in January, now sitting around $83,000. Analysts suggest that BTC is approaching its local bottom but warn that macroeconomic instability and potential Black Swan events could drive prices even lower.

Macroeconomic Pressures Weigh on Bitcoin

The crypto market faces turbulence from multiple sources, including Wall Street’s shift to risk aversion, growing U.S. recession fears, and uncertainty over Trump’s new trade policies. The recent 25% U.S. tariffs on Canadian steel and aluminum led to retaliatory tariffs from Canada and the EU, escalating trade tensions and pushing investors toward safer assets like gold and bonds.

Despite initial optimism following softer inflation data on March 12, which showed a slowdown in consumer price growth, Bitcoin and equities quickly erased gains as trade war concerns took center stage.

Institutional Money Pulling Back

Spot Bitcoin ETFs have seen aggressive outflows since mid-February, including a record $1 billion single-day withdrawal on February 25. Institutional investors appear hesitant, with ETF holdings shrinking despite BlackRock’s IBIT still dominating the market with 568,000 BTC.

Meanwhile, Bitcoin’s open interest (OI)—which tracks the total value of outstanding BTC derivative contracts—plummeted from $70 billion in January to $45.7 billion on March 11. However, OI has started to rebound, suggesting traders may be cautiously re-entering the market.

Historical Trends Suggest Possible Recovery

Analyst CryptoCon highlights that Bitcoin has reached historically low RSI Bollinger Band % levels, indicating an oversold state that often precedes a recovery. He believes the market is mirroring March 2017, when BTC experienced a deep correction before rallying to new highs.

However, another analyst, Doctor Profit, sees two possible scenarios. If market conditions remain stable, Bitcoin could bottom out between $68,000 and $74,000, as suggested by the MVRV indicator. But if a severe economic downturn or a major financial crisis occurs, BTC could plunge toward $50,000.

Uncertainty Reigns

While historical patterns suggest a rebound, Bitcoin’s fate remains tied to global economic shifts. Investors should remain cautious, monitor key support levels, and be prepared for volatility as market forces play out.