Analysts warn that Bitcoin’s price will remain under pressure due to a stronger U.S. dollar and shifting market dynamics.
Global Liquidity and Bitcoin
According to a new analysis by Matrixport, Bitcoin’s price may remain in correction until April. Analysts link the drop to global liquidity and macroeconomic factors, including a stronger U.S. dollar exerting pressure on the cryptocurrency.
Role of Traditional Finance
With Bitcoin increasingly tied to traditional financial systems, analysts now expect the price downturn to last until at least March or April. After the correction, Bitcoin could attempt to bounce back to previous highs.
Investment Strategies and Bitcoin ETFs
Matrixport also notes the growing role of Wall Street investors. While asset managers see Bitcoin as a long-term investment, hedge funds are using arbitrage strategies to profit from its volatility. According to Matrixport, these hedge funds collectively hold $10 billion in Bitcoin ETFs, and with total inflows reaching $39 billion, at least 25% of Bitcoin ETF capital is tied to arbitrage trades.
While Bitcoin remains a key part of the financial sector, changing macroeconomic conditions and traditional investments could impact its price dynamics in the coming months.
