The cryptocurrency market is trying to recover from the recent price drop of Bitcoin to $60,000. Although the current rebound provides temporary relief, macroeconomic data and historical analogies suggest that the process of forming a permanent bottom has only just begun.
A trap of relief or the beginning of growth?
After last week’s wave of selling, which pushed Bitcoin prices to around USD 60,000, the world’s most popular cryptocurrency managed to make up for some of the losses, currently moving in the range of USD 68,000 to USD 71,000. However, analysts are dampening optimism by pointing out that we are only dealing with a so-called “relief rally”. Although panic selling appears to be subsiding, the conditions necessary for a sustained bull market have not yet been met. The market is in a phase of suspension between technological reality and waiting for impulses from traditional financial markets.
This situation is reminiscent of mid-2022, when the market experienced a sharp price capitulation, but it took many months to achieve the so-called time capitulation. Experts do not expect a sharp, V-shaped rebound, but rather a slow process of bottom formation that could take one to three months. In this scenario, it will be crucial to maintain broad consolidation around USD 60,000 and USD 78,000.
The macroeconomic calendar deals the cards
The coming days will be crucial for the short-term fate of Bitcoin, all thanks to data from the American economy. On Wednesday, we will receive delayed reports from the labor market, including data on employment in the non-agricultural sector (Payrolls) and the unemployment rate. The market consensus assumes that unemployment will remain at 4.4%, which would prove the economy’s resilience, but could also postpone the prospect of rapid interest rate cuts by the Fed.
On Friday, investors’ attention will shift to inflation data. Forecasts assume a decline in the Core index to 2.5% and headline inflation to 2.4% per year. If these predictions are confirmed, the market may begin to price in the first interest rate cut in April, and not only in June, as previously assumed. Such a scenario would be a strong fuel for risky assets, which include cryptocurrencies.
Geopolitical risks and technical rock bottom
Despite optimistic signals coming from some indicators, there are still dark clouds hanging over the market. The main threats remain the escalation of tensions between the US and Iran and potential turbulence on the USD/JPY currency pair. If the dollar exceeds the 160 yen barrier, it could trigger a reversal of the carry trade strategy that is unfavorable for crypto.
From a technical analysis perspective, Bitcoin has already suffered huge realized losses, comparable to those from the June declines in 2022, when the price plunged by over 40%. The Fear & Greed indicator also dropped to extreme levels, which paradoxically often heralds the nearness of a market bottom. Despite this, many analysts still expect a retest of the $50,000-$60,000 zone, which is where significant cost levels lie for institutional investors. The current strategy of many players is therefore based on patiently accumulating positions in this range, while maintaining cash reserves in case of further volatility.
