Entering 2025, after experiencing a significant rise, Bitcoin entered a downward mode. On the morning of February 28, Bitcoin plummeted, falling below $82,000. In the early hours of March 4, Bitcoin rapidly declined again, briefly falling below $83,000, with a maximum drop of over 10% within 24 hours, causing nearly 300,000 people globally to be liquidated, with a total liquidation amount reaching $1 billion. In April, influenced by Trump's tariff policies, Bitcoin quickly retraced after reaching a high of $87,400. As of April 3, although the intraday decline narrowed to 1.38%, market panic remained strong.
Macroeconomic Level
The intensification of global economic uncertainty, expectations of rising inflation and interest rates have made investors increasingly cautious about risk assets. As a high-risk investment target, investors often reduce their holdings of Bitcoin during unstable economic conditions. Additionally, Trump's tariff policies have caused turmoil in global markets, leading investors to prefer traditional safe-haven assets like gold to avoid risks, resulting in a massive outflow of funds from Bitcoin-related ETFs, with a total net outflow of $8.6 billion for cryptocurrency-related ETFs on March 4, among which the net outflow from Bitcoin ETFs reached $8.7 billion. Moreover, the correlation between Bitcoin and U.S. stocks has increased, with TradingView indicators showing a correlation of 0.74 with the Nasdaq index, and the downward pressure on U.S. stocks has also transmitted to the Bitcoin market.
Market Trading Level
From on-chain data, prior to Bitcoin's crash, the net outflow from exchanges significantly increased, with a large amount of Bitcoin being transferred to wallets. Some whale addresses holding large amounts of Bitcoin showed signs of selling, further exacerbating market panic and triggering investors to follow suit. On March 18, a mysterious whale opened a super short position of $365 million at the $84,040 level, with a leverage of 40 times, betting on Bitcoin's decline, which intensified the bearish atmosphere in an already fragile market.
Regulatory Policy Level
Although some countries have softened their stance on Bitcoin, globally, there remains significant uncertainty in cryptocurrency regulatory policies. Some countries have strengthened their regulation of cryptocurrencies, leading to a loss of investor confidence in the future market, further suppressing Bitcoin prices.
Uncertain Prospects, Investors Should Be Cautious
The sharp decline in Bitcoin prices has sounded the alarm for investors. The cryptocurrency market is characterized by high risk and high volatility. Investors must remain rational when participating in Bitcoin investments, fully understand the associated risks, and avoid blindly following trends. At the same time, closely monitor the global macroeconomic situation, changes in regulatory policies, and market dynamics to timely adjust investment strategies. There are still many uncertainties regarding Bitcoin's future trends, whether it will rebound from the bottom or continue to decline remains to be seen.