Bitcoin price recovering, but it’s not certain it will hold

In recent days, the price of Bitcoin has been slightly recovering. The problem is that several speculators might interpret the recent bounce as an attempt to resume the bull run, while there are still clear risks of possible further declines. 

The small bounce of the Bitcoin price

Tuesday (the day before yesterday) for a brief moment the price of Bitcoin even dropped below $77,000.

Last Saturday it was at $86,000, so it was a real collapse, albeit contained. 

In particular, on Sunday it gradually fell towards $82,000, while on Monday, with the reopening of the US stock markets, it suddenly dropped first to $79,000 and then to $77,000, and the following night, for a brief moment, it even fell below this last threshold. 

Strong and rapid declines like the one on Monday are generally due to forced liquidations of leveraged long positions, meaning sales not decided by someone but triggered automatically only to cover positions that would otherwise have generated debts. 

This type of declines generate inefficiencies in the price trend, and indeed in the following days such inefficiencies were filled. 

Already on Tuesday itself, shortly before the opening of the USA markets, the price had returned to $81,000, and during the night it also reached $83,000. 

It was therefore a rebound due to the closing of the inefficiencies generated by Monday’s forced liquidations, so much so that it may not yet be concluded, as there are still some to recover above the 84,000$ mark.

The risks of a possible recovery in the price of Bitcoin

In light of this, it would be incorrect to interpret this small rebound as a recovery attempt. 

It is instead in all respects only a pause, even if this does not necessarily mean that the descent must eventually resume. 

The fact is that for the next seven days no particular volatility in the market of Bitcoin is expected, but in the second part of next week, the volatility could return.

Although it is not possible to determine in advance whether such volatility may be bullish or bearish, the scenario described earlier leans the balance more towards this second hypothesis. 

In particular, the price of gold is still in the ascending phase that began on December 18, the day of the Bitcoin price peak of the bull run at the end of 2024, and this continuous growth that does not seem to want to stop clearly indicates how for almost three months there has been a capital flight from risk-on assets, like Bitcoin, to risk-off ones, like gold. 

The tariff policy of Donald Trump

The underlying problem is the risks of a recession in the USA, which have risen to 40% on Polymarket.

These in turn are caused by the economic and especially commercial policy of Donald Trump, given that the tariffs he is imposing on half the world have a double negative effect, as on one hand they reduce trade, thus also reducing the possibility of generating wealth in the USA, while on the other hand they increase inflation.

To tell the truth, the data released yesterday on inflation in the USA in February was definitely positive and better than expected, but it should not be forgotten that the bulk of the tariffs only came into effect in March. 

The markets are actually pricing in a decrease in inflation even in March, but they are not limited to this. In fact, they are probably already pricing in an increase in inflation starting from April, and especially the increased risk of recession for 2025. 

In such a scenario, if the politica commerciale e economica di Trump does not change, it is reasonable to expect further problems even in the financial markets, including that of Bitcoin. 

The next price levels

According to analyst Matthew Hyland, a weekly close above $89,000 would be necessary to hypothesize the end of the current short-term bear trend.

This scenario as of today does not seem particularly likely. 

Hyland also warns that in the event of a resumption of the bear trend, the two subsequent targets could be $74,000, and perhaps even $69,000. 

In other words, it could end up losing all the gains obtained with the Trump trade. 

To all this, it should be added that in phases like these, often the difficult period lasts until mid-year, even if, for example, in 2017 the recovery began at the end of April. 

The suffering of altcoins

The discussion for altcoins is different. 

In fact, the downward trend in the prices of many altcoins has been so intense that it might even be exhausted in some cases. 

For example, the price of Ethereum in Bitcoin has reached the lowest level since June 2020, so much so that it seems difficult for it to fall significantly further. The minimum level in 2020 was 0.021 BTC, while now it is at 0.022.

Furthermore, the altseason index of CMC reveals that the crypto markets are now in full Bitcoin season, so much so that it is unlikely for its level to drop significantly, given that on a scale from 0 to 100 it stands at 13.

This does not mean at all that an altseason could start soon, but it might mean that the collapse in altcoin prices could be near the bottom.