Bitcoin's Rollercoaster Ride: What's Next After the Big Drop?
Bitcoin has taken a nosedive, losing nearly half its value from its peak last October. It's now worth less than it was back in November 2024. This isn't just a small blip; it's a significant drop.
The Downhill Slide
Things started to go downhill in early February. A massive sell-off happened, wiping out over $2.7 billion. This was the biggest drop since 2022. Several big events triggered this:
- Kevin Warsh might become the next Federal Reserve chair.
- Poor performance of major tech companies, like Microsoft, which saw a 10% drop.
- Even precious metals took a hit.
Causes Behind the Decline
A lot of money is flowing into AI-related stocks, pulling liquidity away from crypto. Bitcoin is struggling in both upswings and downswings, a classic sign of a bear market. Even when buyers stepped in near the $60,000 mark, the market is still shaky.
- ETF flows are negative.
- Digital asset treasuries are sitting on big losses.
- Institutions are hesitant to jump in.
Looking Ahead
Things are still uncertain. Experts predict more choppy and volatile price action in the near term. For a real recovery, three things need to happen:
- Return of the Coinbase premium.
- Renewed ETF inflows.
- Stabilization in basis rates.
Right now, institutional ETF and derivatives flows are driving the price.
