Bitcoin hit a four-month low of $76,700 following a stock market correction. Despite this, there are signs indicating a potential turnaround.
Current Bitcoin Market Situation
Some analysts argue Bitcoin entered a bear market. However, the current price action is distinct from the November 2021 drop. A similar dip today would mean a fall to $64,400 by the end of March. The ongoing correction mirrors a 31.5% drop from $71,940 to $49,220 over 60 days. Meanwhile, the DXY index strengthened back then, though it has decreased from 109.2 to 104 now.
Stability of Bitcoin Derivatives
The Bitcoin derivatives market remains stable, with the current annualized futures premium at 4.5% despite a 19% price drop from March 2 to 11. Perpetual futures funding rates signal balanced demand, amid sharp declines in stocks related to AI and recession fears.
Impact of Real Estate Crisis
Early signs of a real estate crisis could accelerate capital flow into other assets. Housing contract signings in the US hit record lows, and government-backed loan delinquencies exceed levels of the 2008 crisis. Bitcoin's path to recovery is bolstered by a weaker USD and market resilience.
In conclusion, despite the current price drop, several factors suggest a potential end to the correction in the Bitcoin market. These include derivative market activity, a weakening USD, and signals of a potential real estate crisis.
