Bitcoin (BTC) may be in the process of forming a bottom and could potentially recover to the $90,000 level as global economic and political factors provide certain support to the cryptocurrency market.
According to Markus Thielen, founder of 10x Research, one of the key factors influencing Bitcoin’s price is former U.S. President Donald Trump’s shifting stance on tariffs. While Trump initially took a hardline approach to imposing tariffs on Chinese imports, he has recently shown more flexibility, particularly regarding the retaliatory tariffs set to take effect on April 2.
Thielen stated:
“Bitcoin is trying to form a bottom, supported by Trump’s recent flexibility on upcoming retaliatory tariffs, softening his previously rigid statements.”
The Fed Maintains a Dovish Policy
In addition to political factors, the U.S. Federal Reserve’s (Fed) monetary policy also plays a crucial role in Bitcoin’s price trends. During its meeting on March 18-19, the Fed signaled that it might “overlook short-term inflationary pressures.” This has led many analysts to speculate that the Fed will maintain its accommodative monetary stance rather than raise interest rates further.
Thielen believes this move could provide a boost to financial markets in general and Bitcoin in particular:
“Fed Chair Jerome Powell’s dovish tone suggests that the Fed’s put option remains in place, offering additional support for a recovery in stock prices and Bitcoin.”
This could encourage capital flows into higher-risk assets, including cryptocurrencies.
Technical Indicators Support Bitcoin’s Recovery
Beyond macroeconomic factors, technical indicators also suggest that Bitcoin may be in a bottoming phase with potential for an upward movement. According to data from 10x Research, Bitcoin’s weekly reversal indicators have declined to levels comparable to previous bull market continuations, notably in September 2023 and August 2024.
Currently, Bitcoin’s 21-day moving average stands at $85,200, signaling that a bullish trend could be on the horizon. However, Thielen warns that Bitcoin may face “significant resistance” at the $90,000 level, which could slow its ascent before finding a stronger breakout catalyst.
“There is no clear catalyst for an immediate parabolic rally, but the market outlook has turned more positive.”
Bitcoin’s Current Market Performance
At the time of writing, Bitcoin is trading at $87,497, up 3.79% over the past 24 hours. The daily high has reached $87,497, while the daily low stands at $84,302.
A combination of Trump’s softer stance on tariffs, the Fed’s dovish monetary policy, and improving technical indicators could help Bitcoin recover in the short term. However, investors should closely monitor economic developments and global financial policies to make well-informed trading decisions.
