4 signs that $76.7K Bitcoin is probably the ultimate low
Bitcoin (BTC) recently hit a four-month low at $76,700 on March 11, coinciding with a substantial 6% decline in the S&P 500 index. This stock market correction has pushed the index to its lowest point in six months, as market participants react to heightened probabilities of a global economic slowdown. Interestingly, despite Bitcoin’s sharp 30% retracement from its all-time peak of $109,350, a set of indicators suggests that the negative price trend may be approaching its conclusion.
### Bitcoin Bear Market Needs 40% Drop, Strong USD
Analysts remain divided on whether Bitcoin has entered a bear market. Current price movements starkly contrast with the dramatic plunge seen in November 2021, which began with a 41% crash from $69,000 to $40,560 in just 60 days. If a similar pattern were to unfold today, it would imply a drop to around $64,400 by the end of March.
The present correction draws parallels to the 31.5% decrease from $71,940 on June 7, 2024, down to $49,220 over a two-month period. During the late 2021 bear market, the U.S. dollar gained strength against a basket of currencies, as evidenced by the DXY index rising from 92.4 in September to 96.0 by December. However, the DXY began 2025 at 109.2 but has since decreased to 104, revealing a potential inverse relationship between the dollar and Bitcoin. This scenario generally positions Bitcoin as a risk-on asset, rather than a safe-haven in times of dollar weakness.
Moreover, the current market conditions do not indicate a significant shift of investors toward cash positions, which bodes well for Bitcoin’s price stability.
### BTC Derivatives Healthy Amid AI Bubble Fears
Remarkably, the Bitcoin derivatives market displays stability, with the annualized premium on futures currently at 4.5%, even after a 19% price drop from March 2 to March 11. For context, on June 18, 2022, this premium fell below zero following a steep 44% decline from $31,350 to $17,585 over 12 days.
The Bitcoin perpetual futures funding rate is currently near zero, suggesting a balanced demand for both long and short positions. In bearish conditions, high demand for short positions typically drives the funding rate downward. Market sentiment has waned for several publicly traded firms valued over $150 billion, including Tesla (-54%), Palantir (-40%), Nvidia (-34%), and others, leading to overall bearish sentiment as investors grow wary of an AI bubble and increasing recession risks.
### Potential US Government Shutdown and Market Reaction
Concerns are also rising regarding a potential U.S. government shutdown on March 15, which necessitates lawmakers passing a bill to raise the debt ceiling. Yet, the Republican party is currently divided on the matter, presenting a challenge for consensus. If an agreement is reached, risk-on assets—including Bitcoin—may experience a positive price reaction.
### Real Estate Crisis: A Double-Edged Sword
Emerging signs of a real estate crisis could pave the way for capital to flow into alternative scarce assets like Bitcoin. Data from the U.S. National Association of Realtors as of February 27 reveals that home contract signings have plunged to an all-time low in January. Additionally, a February 23 piece in The Wall Street Journal disclosed that over 7% of Federal Housing Administration-insured loans are at least 90 days overdue, exceeding the peak observed during the 2008 subprime crisis.
In summary, factors such as a weaker U.S. dollar, historical evidence suggesting that a 30% price drop does not indicate a bear market, resilience in Bitcoin’s derivatives market, risks associated with a potential government shutdown, and early indicators of a real estate crisis all contribute to a supportive environment for Bitcoin to reclaim the $90,000 mark.
