Bitcoin briefly plummeted to $94,700 before rebounding at the start of the new trading week. As of this report, BTC is valued at $96,935, reflecting volatility in the crypto market amid global economic developments.
Factors Behind Bitcoin’s Decline
The primary driver of Bitcoin’s drop was the announcement by former U.S. President Donald Trump of new import tariffs on steel and aluminum. The 25% tariffs are part of an expanding trade war, impacting financial markets, including cryptocurrencies. Key pressure factors include:
- Rising Economic Uncertainty. Trade wars generate market instability, prompting investors to shift to safer assets. During uncertain periods, many traders prefer to lock in profits, triggering short-term price declines.
- Inflation Concerns and Federal Reserve Policy Forecasts. The tariff decision follows earlier increases on imports from China, Canada, and Mexico. Although tariffs on Canada and Mexico were paused, the market has yet to fully recover from the initial shock. Investors fear that an escalating trade war could drive inflation, forcing the Federal Reserve to maintain its current interest rate policy. Current market sentiment suggests a 93% probability that the Fed will leave rates unchanged at its next meeting.
- Investor Sentiment and Fear Index. The Fear and Greed Index remains in the “fear” zone at 43 out of 100, indicating low confidence in the market. Heightened fear often leads to sell-offs, contributing to temporary price declines in cryptocurrencies.
Bitcoin Price Predictions: What’s Next?
Market analysts offer mixed forecasts regarding Bitcoin’s future crypto price trajectory:
- Sideways Movement Expected. Crypto analyst Doctor Profit predicts that Bitcoin will trade within a range through late February and March, with potential dips to $90,000 presenting buying opportunities. He believes BTC needs more time to consolidate before reaching new highs, likely by the end of March. Institutional interest is expected to support long-term growth.
- Whale Accumulation Signals Strength. Crypto blogger Crypto Rover highlights increasing Bitcoin accumulation by large investors, which may sustain upward momentum. According to his technical analysis, BTC is forming a pattern that suggests a possible move toward new all-time highs.
- Potential for Further Decline. Conversely, trader Sensei warns that Bitcoin is nearing the critical MA100 support level. A breakdown below this moving average could signal further downside risks, reinforcing bearish market sentiment.
As market conditions evolve, Bitcoin’s price movements will largely depend on macroeconomic factors and investor sentiment. While some analysts forecast a recovery driven by institutional demand, others caution that technical indicators point to further downside risk. Traders should remain vigilant and monitor key support and resistance levels to navigate the ongoing market volatility.
