Bitcoin got off to a bad start in the second week of March, with market sentiment falling to a freezing point and prices falling below $80,000, marking the largest weekly drop in US dollars in history. Bitcoin is facing severe tests as investors in risky assets withdraw. Despite the general pessimism in the market, some analysts and traders believe that the current price level may provide a good risk-reward opportunity for long-term investors. At the same time, the continued buying behavior of Bitcoin whales in the past week has also brought a glimmer of hope to the market.
Bitcoin plummeted 14% in a single week, and market sentiment fell into extreme panic
The price of Bitcoin fell sharply last week, with a weekly drop of up to 14%, and finally closed at a price just above $80,000. This is the largest weekly drop in Bitcoin in US dollar terms in history, data from Cointelegraph Markets Pro and TradingView. Although bulls narrowly avoided a rematch with the lows at the end of February, market sentiment remains extremely cautious. Analyst Kevin Svenson noted in his latest X-platform analysis: “Bitcoin is currently in a critical area of the weekly parabolic trend. We are still holding last week’s low and have not yet made a new low. This is Bitcoin’s last chance to maintain an exponential high.”
Trader SuperBro also expressed a similar view, believing that Bitcoin may retest the $78,000 support level. He said after the weekly close: “Although the closing price is above the low of the previous candle and the 50% level, it has fallen below the rising trend line since October 2023. Such candle patterns rarely reverse immediately, so despite the bullish divergence on the low time frame, I am still prepared for a sweep of the lows.”
However, not everyone believes that the market has entered a bear market. Trader CrypNuevo emphasized in an X-platform analysis: “Have we entered a bear market? In short, no. There is not enough evidence to confirm this at present.” Nevertheless, he also admitted that Bitcoin may fall further, especially the key area around $77,000. He noted: “On the high time frame, we can see some liquidations occurring around $77,000, although these signals are not as reliable as liquidations on the low time frame.”
Risk aversion in the market heats up as CPI data is released
This week, the United States will release a series of key macroeconomic data, including the Consumer Price Index (CPI) and Producer Price Index (PPI) for February, as well as employment data and unemployment benefit application data. However, the market has entered “risk-off mode” in advance. Last month, both CPI and PPI data exceeded expectations, causing market confidence to be frustrated. Since then, neither cryptocurrencies nor stock markets have been able to achieve an effective rebound.
According to CME Group’s FedWatch tool, the market’s expectations for the Federal Reserve to cut interest rates at the March 19 meeting are only 3%, and expectations for a rate cut at the May meeting are also falling rapidly. Trading resource The Kobeissi Letter noted in its latest X-Platform analysis: “Amid the chaos of the trade war, we have seen a sharp drop in economic growth expectations. The Atlanta Fed last week lowered its GDP growth forecast for the first quarter of 2025 to -2.8%. As a result, we saw a sharp rise in expectations for rate cuts last week.”
Kobeissi also mentioned that the stock market may see a “red” open in the short term. He concluded: “The decline in cryptocurrencies clearly shows that risk aversion is heating up in the market last weekend.”
Bitcoin price may return to 2021 highs?
For the bottom target of Bitcoin price, market analysis shows that bulls are facing increasing pressure. With the $80,000 mark at risk, some classic technical analysis tools show that Bitcoin’s reliable support level may be around the 2021 all-time high of $69,000.
The “Lowest Price Forward” model created by network economist Timothy Peterson in 2019 is able to predict price levels that Bitcoin will not fall below in the future. The model successfully predicted in mid-2020 that Bitcoin would not fall below $10,000 after September. Today, the new support level is around $69,000. “The minimum price prediction model doesn’t tell you where Bitcoin will go, but it tells you where it won’t go below. There is a 95% chance that it won’t go below $69,000,” Peterson said on the X platform.
Peterson’s model is not the only tool that predicts that Bitcoin may fall to lower levels. Cointelegraph reported that more and more analysts believe that Bitcoin may fall to around $75,000, with the 50-week simple moving average (SMA) being a key target, currently at $75,560. In addition, the 200-day SMA, a traditional bull market support line, fell for the first time in last week’s close, further exacerbating the market’s pessimism.
Cryptocurrency and macro sentiment both fall to historic lows
Currently, sentiment in Bitcoin and the entire cryptocurrency market is in a state of extreme depression. According to the latest data from the Crypto Fear & Greed Index, market sentiment has returned to the “extreme fear” zone, with only one day last week briefly out of this range. The index has rarely seen such low readings in recent years, hitting a three-year low of 10/100 when Bitcoin fell to $78,000 last month.
Not only the cryptocurrency market, but also the stock market has shown rare nervousness. Financial and trading resource Barchart pointed out that the current market sentiment is the most pessimistic since the global financial crisis and the COVID-19 crash. However, Peterson believes that this extreme pessimism may actually be a bullish signal. He said: “This is the lowest reading since the global financial crisis and the COVID-19 crash. The market has risen sharply since then. This may be a once-in-a-decade opportunity.”
Anthony Pompliano, founder and CEO of Professional Capital Management, called on cryptocurrency investors not to pay too much attention to sentiment indicators. He wrote in a post on the X platform on March 10: “A year ago, the cryptocurrency fear and greed index was at 92 for ‘extreme greed’. Today, we are at 17 for ‘extreme fear’. And Bitcoin has risen 20% in the same time period. Don’t be fooled by network sentiment, these are all noise.”
Bitcoin whales quietly buy the bottom, the market may usher in a turnaround?
In the current market environment, is there still a ray of hope? Data from research firm Santiment shows that Bitcoin whales and “sharks” (entities holding more than 10 Bitcoins) have begun to increase their Bitcoin holdings over the past week. Santiment commented on the X platform: “In short, their slight sell-off in mid-February and early March exacerbated the cryptocurrency’s decline. But since March 3, wallets holding more than 10 Bitcoins have accumulated nearly 5,000 Bitcoins.”
Although prices have not yet reflected the confidence of these large investors, the delayed reaction may mean that the market will usher in a round of rebound in the coming weeks. Santiment concluded: “Prices have not yet responded to their buying behavior, but if these large key holders continue to increase their holdings, don’t be surprised to see a better performance in the second half of March, especially after we experienced such a brutal decline 7 weeks after Bitcoin hit an all-time high.”
Overall, although the Bitcoin market is currently under great pressure, whales’ bottom-fishing behavior and extreme market sentiment may be laying the groundwork for a future rebound. Investors need to remain vigilant, but they should not ignore potential long-term opportunities.
