On March 3, Bitcoin's price sharply declined, falling below $83,000 and triggering over $150 million in liquidations across the cryptocurrency market.
Sharp Decline: Factors and Consequences
The decline coincided with renewed market uncertainty, fueled by geopolitical and economic developments in the United States. The sell-off began as traditional financial markets reacted to news of potential new trade tariffs. U.S. Commerce Secretary Howard Lutnick suggested that President Donald Trump was considering imposing tariffs on Canadian imports, adding uncertainty to financial markets.
Market Anticipation: Geopolitical Influence
Bitcoin, which had risen recently on speculation about a U.S. strategic crypto reserve, initially reached new highs before succumbing to sell-side pressure. Analysts noted that the return of traditional finance traders after the weekend amplified the decline, reflecting broader market unease. The price drop had an immediate effect on leveraged positions: data from CoinGlass showed that over $150 million in liquidations occurred in just four hours. Despite the downturn, some market participants remained optimistic, pointing to Bitcoin's cycles of consolidations, breakdowns, and subsequent recoveries.
Analysis: Recovery Prospects
Market observers are closely watching whether Bitcoin can establish a higher low, which could set the stage for a rebound toward the $100,000 mark. Some traders draw parallels with previous bullish consolidations, suggesting Bitcoin’s long-term trajectory remains intact. Keith Alan, co-founder of Material Indicators, highlighted Bitcoin’s ability to close above its 21-week simple moving average (SMA), historically an indicator of renewed bullish momentum. He cautioned that resistance around $90,000 could lead to further short-term volatility.
Bitcoin’s latest pullback underscores the continued volatility within the crypto market. Investors focus on the asset's stabilization and upcoming announcements that could inject optimism.
