Bitcoin Price Falls Below $80,000 Amidst Market Turmoil, Can BTC Rebound?

Bitcoin price dropped below the $80,000 mark on Monday, driven by persistent selling pressure in the equities market. The flagship cryptocurrency fell as low as $77,396.43, its lowest level since November, according to Coin Metrics.

The slump in Bitcoin’s price also impacted crypto-related stocks, with Coinbase declining by 17.6%, Robinhood losing 19.8%, and MicroStrategy, now known as Strategy, dropping more than 16%.

Market Downtrend and Investor Sentiment

Bitcoin exchange-traded funds (ETFs) recorded their fourth consecutive week of outflows, amounting to $867 million last week, bringing the four-week total to $4.75 billion, as per CoinShares.

This continuous bearish sentiment pushed crypto prices even lower over the weekend, with Bitcoin briefly touching the $80,000 level on Sunday evening for the first time since February 28.

President Donald Trump’s recent executive order to establish a U.S. Bitcoin reserve and digital asset stockpile failed to provide the anticipated boost to the crypto market.

Instead, broader macroeconomic uncertainties, including Trump’s indication that a U.S. recession remains a possibility, led to an accelerated market downturn on Monday. Without a specific catalyst to drive a reversal, macroeconomic concerns are expected to continue weighing on cryptocurrency prices.

Investors are keenly watching economic indicators, such as the Job Openings and Labor Turnover Survey (JOLTS), the Consumer Price Index (CPI), and the Producer Price Index (PPI), for further direction.

A 27% Decline from All-Time High

Bitcoin's fall to $78,000 on Monday represents a 27% decline from its all-time high of $107,000 in January. The combined losses in the crypto and stock markets have erased nearly $6 trillion in market capitalization since the start of the year.

The S&P 500 suffered a staggering $1.4 trillion wipeout on Monday alone, marking its largest single-day loss since 2022.

Investor sentiment has shifted dramatically, with the Fear and Greed Index plummeting to 14, signaling extreme fear. This is a stark contrast to last year when extreme greed dominated following Trump’s election victory.

Analysts at The Kobeissi Letters noted that the market has swung from extreme optimism to extreme pessimism within days, leading to severe price corrections across risk assets.

The Role of Institutional Investors and Derivatives Market

Bitcoin's decline has also been exacerbated by institutional investors pulling capital from the market.

Digital asset investment products have seen continuous outflows, totaling $4.75 billion in the last month, reducing year-to-date inflows to $2.6 billion. Bitcoin has been the hardest hit, with outflows reaching $756 million last week.

Additionally, the derivatives market has contributed to heightened volatility, with $650.80 million in liquidations in the past 24 hours alone.

Long positions suffered the most, with $595.75 million liquidated, further increasing market supply and exerting downward pressure on prices. Bitcoin and Ethereum saw the highest liquidations, with $264.22 million and $114.76 million, respectively.

Macroeconomic Concerns and Technical Indicators

Trump’s policy stance has introduced uncertainty into the market, particularly regarding trade tariffs on Canada, Mexico, and China.

The recent correction aligns with technical trends, as Bitcoin dipped below the key 200-day Exponential Moving Average (EMA) at $85,722. Momentum indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) suggest that further declines may be imminent.

RSI is trending downward, and MACD has flashed red histogram bars under the neutral line, signaling negative momentum.

The Growing Correlation Between Crypto and Equities

Bitcoin’s price movements are increasingly correlated with traditional financial markets. Ruslan Lienkha, Chief of Markets at YouHodler, highlighted that Bitcoin is still perceived as a high-risk asset and tends to react strongly to broader market sentiment.

The crypto market has also responded more to Trump’s tariff policies than his regulatory support for digital assets, further exacerbating the downturn.

The demand for short-dated put options on Bitcoin, Ethereum, and Solana indicates a defensive stance among traders.

The U.S. bond market is signaling a risk-off environment, which has translated into increased selling pressure across multiple asset classes, including crypto.

Conclusion: Can Bitcoin Rebound?

As of this writing on March 11, BTC price has returned to $81,824, but remains bearish with the RSI value still below 50.

Despite the current downtrend, some analysts believe Bitcoin could decouple from traditional markets in the long run. Stabolut CEO Eneko Knorr suggested that while Bitcoin’s correlation with equities affects its short-term trajectory, its long-term outlook remains positive.

For a sustainable recovery, Bitcoin will need positive macroeconomic data and signs of easing inflation. While the creation of a U.S.

Bitcoin reserve could provide temporary support, a meaningful long-term impact would require sustained institutional interest and favorable economic conditions.

As the market navigates through these turbulent times, investors remain cautiously optimistic about Bitcoin’s long-term potential, but the near-term outlook remains clouded by macroeconomic uncertainties and risk-averse sentiment.