The price of Bitcoin has fallen to a four-month low recently, prompting investors to wonder if this is a chance to buy or the beginning of a deeper slide.
Bitcoin has fallen recently to a four-month low of $76,700 on March 11 following a steep decline in the stock market. The S&P 500 declined by 6% for the week, reaching a six-month low as investors panicked over a potential global economic slowdown.
In spite of Bitcoin’s 30% correction from its record high price of $109,350, a few vital metrics indicate that the correction process could be nearing an end and recovery could soon set in.
Here are four signs that now might be a good time to buy Bitcoin:
1. Bitcoin’s Decline Doesn’t Equal a Bear Market
Some experts believe that Bitcoin is in a bear market, but the recent decline is not the same as the 2021 collapse. At that time, Bitcoin dropped 41% from $69,000 to $40,560 over 60 days.
If the same drop occurred today, Bitcoin would have to drop to approximately $64,400 at the end of March. Currently, Bitcoin’s correction is more like the 31.5% drop from $71,940 in June 2024 to $49,220 within 60 days.
2. The U.S. Dollar Is Losing Strength, Which Benefits Bitcoin
Bitcoin tends to do the opposite of the U.S. dollar. When Bitcoin went into bear market in 2021, the U.S. dollar index (DXY) shot up from 92.4 to 96.0. Here, the DXY began 2025 at 109.2 but has since dropped to 104.
This declining dollar indicates that investors are not running to cash, which may help prop up Bitcoin’s price in the short term.
3. Bitcoin’s Derivatives Market Shows Strength
The Bitcoin futures market is still healthy, even with recent price declines. The annualized premium on Bitcoin futures is now 4.5%, which is far healthier than in past market crashes.
For instance, in June 2022, when Bitcoin fell 44% from $31,350 to $17,585, the futures premium fell to 0%. Currently, traders are not demonstrating the same degree of fear, indicating that the market is anticipating a rebound.
Bitcoin’s perpetual futures funding rate is close to zero, showing equilibrium between sellers and buyers. During bear markets, shorting typically prevails, driving this rate negative. Large-cap companies such as Tesla (-54%), Palantir (-40%), and Nvidia (-34%) have plummeted hard, particularly in the AI segment, as fears of recession mount.
4. Economic Uncertainty and Real Estate Crisis Could Push Bitcoin Higher
Fears of a U.S. government shutdown on March 15 may introduce market volatility. If an agreement is made, Bitcoin and other risk assets might experience increased investor confidence.
Meanwhile, indications of a housing crisis are surfacing. Home sales reached an all-time low in January, and mortgage defaults have increased above 2008 levels. This might push investors towards Bitcoin as a hedge against financial uncertainty.
Despite Bitcoin’s drop, key signs suggest the correction may be ending. A weaker U.S. dollar, strong derivatives market, and economic uncertainty could support a recovery, potentially pushing Bitcoin back toward $90,000.
Also Read: Bitcoin Miners Are Selling Big: Will BTC Stay Above $80k or crash?
The Crypto Times – Read More