The week began with a sharp decline in Bitcoin's value, reaching $91,170. This collapse aligned with global market adjustments. In the article, we examine the key factors influencing this situation and discuss potential recovery paths.
Causes of Bitcoin's Drop
Bitcoin has entered a technical correction, dropping by over 16% since the start of the year. The main factors include potential stagflation risks in the United States and their impact on the Federal Reserve. Donald Trump's new tariffs on American, Canadian, and Chinese goods increase inflationary pressures. This could lead to higher prices and hold inflation above the 2% target.
Market Consequences
The collapse in Bitcoin's value has led to a sharp increase in liquidations. Exchanges closed leveraged positions, causing daily liquidations to almost $400 million, the highest level in weeks.
Recovery Prospects
There are three key reasons why Bitcoin's price may recover. First, it has tended to end the week positively in recent weeks following a Monday drop. Second, historically, February has shown positive dynamics for Bitcoin. Third, Trump may use the threat of tariffs to achieve a better deal, which could stimulate crypto growth.
Despite the current decline, there are reasons for optimism. Historical data and market trends suggest the potential recovery of Bitcoin prices. Additionally, political changes in the U.S. may improve the market situation.
