Here’s Why Bitcoin Price Correction Could Last Until April

Bitcoin’s price correction is likely to persist until April, as a result of various macroeconomic factors and changing market dynamics, according to a recent analysis by Matrixport. The cryptocurrency market has seen increasing ties to traditional financial systems, and analysts point to a stronger U.S. dollar as one of the primary contributors to the ongoing pressure on Bitcoin prices.

Matrixport attributes the downturn to global liquidity and the surging U.S. dollar, which is negatively impacting Bitcoin. The analysts explain that as the dollar strengthens, liquidity in the global markets tends to decline, which places downward pressure on Bitcoin’s price. They further emphasize that the peak of global liquidity occurred in late December 2024, driven by the U.S. dollar’s strength, which has contributed to Bitcoin’s continued price correction.

While Bitcoin’s relationship with traditional finance is growing stronger, analysts suggest that the price correction could last until at least March or April. Once the correction period concludes, they predict that Bitcoin may attempt a rebound toward previous price highs, driven by a renewed investor appetite for the cryptocurrency.

The role of Wall Street investors has also become more prominent in Bitcoin’s price movement. Institutional players, such as wealth and asset managers, view Bitcoin as a long-term investment, while hedge funds are increasingly leveraging arbitrage strategies to profit from Bitcoin’s price volatility. Matrixport notes that hedge funds collectively hold $10 billion in Bitcoin exchange-traded funds (ETFs), and with a total of $39 billion in inflows, approximately 25% of Bitcoin ETF capital is tied to these arbitrage trades. This adds another layer of complexity to Bitcoin’s price dynamics, as institutional activities could influence price movements.

In conclusion, Bitcoin’s ongoing correction is likely influenced by a combination of macroeconomic factors, including the stronger U.S. dollar and increased Wall Street involvement in the cryptocurrency market. The correction may last until at least April, after which Bitcoin may seek to recover toward higher price levels, depending on broader market conditions and investor sentiment.