Thomas Daniels
A recent research by Matrixport predicts that the price of bitcoin will continue to be under pressure until at least April. The research attributes the current fall to macroeconomic issues and changes in global liquidity, specifically the stronger U.S. dollar, which is pushing the cryptocurrency lower.
Bitcoin Faces Significant Obstacles
Bitcoin has grown more intertwined with conventional financial markets, even while spot Bitcoin exchange-traded fund (ETF) inflows have increased dramatically, reaching $39 billion in the last 14 months. According to Matrixport researchers, Bitcoin is now more vulnerable to macroeconomic developments, such as currency swings, as Wall Street becomes more involved.
According to the research, “this liquidity measure declines when the U.S. dollar strengthens, which suggests downward pressure on Bitcoin prices.” The company goes on to say that a strong U.S. dollar drove a high in global liquidity in late December 2024, which clearly explains why Bitcoin’s price is still declining.
Market Impact and Institutional Strategies
Additionally, Matrixport highlights the increasing impact of institutional investors on changes in the price of Bitcoin. Hedge funds have used arbitrage techniques to profit from Bitcoin’s volatility, even though wealth and asset managers see it as a long-term investment. According to the research, hedge funds own $10 billion worth of Bitcoin ETFs overall, which accounts for about 25% of all ETF inflows.
Bitcoin’s price trajectory is still susceptible to changes in the macroeconomic environment because of its extensive integration into the larger financial system. Before a possible comeback attempt, analysts anticipate that the correction phase will last until at least March or April.
