Following a period of notable gains, the crypto market experienced a significant decline, creating uncertainty in February. The market crash, which saw investors lose billions, left many reeling, particularly after the sharp crash in the last week, referred to by some analysts as the ‘Trump-dump.’ Despite this, increased activity by major investors, or ‘whales,’ around the market’s dip suggests a potential strong recovery as March approaches.
February’s market crash was primarily triggered by Donald Trump’s proposal of a 25% tariff on the European Union combined with a $1.5 billion hack at the Bybit exchange. These events led to massive liquidations, plummeting Bitcoin to a three-month low of under $80K.
Arthur Hayes, the former CEO of BitMEX and now Chief Investment Officer at Maelstrom, had earlier anticipated a significant market downturn, which he dubbed a “Trump dump,” following the commencement of Trump’s administration.
He predicted that the challenges in implementing Trump’s pro-crypto policies, such as establishing a Bitcoin reserve and creating a crypto-friendly atmosphere, would become apparent to investors.
Hayes expected that the market decline, referred to as the “Trump dump,” would conclude by March, leading to a recovery. Notably, despite the dip in Bitcoin prices, several institutions, including Microstrategy, continued purchasing Bitcoin, viewing the lower prices as an opportunity to accumulate more at a discount.
Moreover, despite the recent decline in Bitcoin’s value, Kiyosaki remains bullish on its long-term potential, describing it as “money with integrity” in contrast to what he calls “fake money.” He expressed enthusiasm during market lows, saying, “When Bitcoin crashes, I smile and buy more.”
Historically, March has seen positive trends in the crypto market, with Bitcoin and Ethereum both averaging gains of nearly 17% over the past four years, according to data from Coinglass.
However, this year’s outlook might shift due to increasing inflation and a strengthening DXY. The market has already felt the impact of significant ETF volume outflows, and continued outflows in March could push the market to new lows.
On a positive note, the recent release of the personal consumption expenditure (PCE) data, which shows a decline to 2.6%, has brought some hope into the market. The focus now turns to the upcoming nonfarm payroll (NFP) report, with economists expecting a decrease to 133k in February from 143k in January, as polled by Reuters, while the unemployment rate is projected to stay at 4.0%.
Moving forward, the release of the CPI data on March 12 will be crucial. Any bearish outcomes could plunge the chances of a market rebound. In such a scenario, Bitcoin’s price might consolidate between $70K and $90K throughout March, depending on the broader macroeconomic news. This could significantly affect altcoins, determining whether they will drop to new lows, consolidate, or reach new highs.
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