Bitcoin (BTC) is facing a major revision amid the volatility of the market

Bitcoin (BTC) has recently received a significant price correction, falling 29.7% from its historic peak of $109,590 on January 20th to $77,041 last week. This represents the second major adjustment in the current bullish cycle, as reported by Bitfinex Alpha.

Market dynamics and institutional impacts

Historically, bull markets often withstand corrections of around 30% before resuming their upward trajectory. However, the current gatherings are characterized by shallower revisions, primarily due to significant institutional participation and interest from the Bitcoin ETF. Nevertheless, last week we saw a significant $921.4 million outflow from US spot Bitcoin ETFs, suggesting that institutional investors have not yet re-entered the market to reduce sales pressure.

Short-term holder challenges

Short-term holders are currently facing unrealized losses, increasing the likelihood of continuing sales pressure. Those who have purchased Bitcoin within the last 7-30 days are particularly susceptible to surrender. Historically, the slower new capital inflows and trends in shift cost standards have shown weaker demand. This becomes clear when Bitcoin struggles to maintain its critical support level. Without new buyers, Bitcoin could enter a long-term integration phase or even decline as weaker investors withdraw their positions.

Long-term investors and economic indicators

The key question remains whether long-term investors or institutional capital will return at these low price levels. If these “deep pockets” begin to absorb supply, they can trigger accumulation stages, stabilize prices and reverse market sentiment.

In a broader economic context, the US economy is at a crossroads. The labor market remains strong but cooled, and inflation slows, but consumer confidence is declining. In February, there was stable inflation as lower airline fares and lower gas prices offset rising housing costs. However, supply chain disruptions and tariff pressures could raise prices in the coming months. Job creation rose in January, but layoffs hit a seven-month low, indicating stability. Nevertheless, hidden unemployment rates are rising, with trade uncertainty, particularly new tariffs on major imports, weighing business sentiment. Consumer trust has fallen to two years’ lowest prices, with rising inflation expectations and economic uncertainty overshadowing the outlook for home and business. How the Federal Reserve responds to trade policy and inflation risks determines whether the economy remains stable or weak.

Development of the crypto market

In recent crypto market developments, CBOE BZX Exchange has proposed a bet on Fidelity’s Ethereum Fund. This could potentially increase capital inflows into ETH ETFs, especially when staking yields (approximately 3-4% per year) are incorporated. However, SEC scrutiny remains an important hurdle. In Thailand, the Securities Commission has approved USDT and USDC transactions on licensed exchanges and set legal precedents that could affect global Stablecoin policy. In the US, Sen. Cynthia Ramis has reintroduced the Bitcoin Act to establish a strategic Bitcoin Reserve aimed at strengthening financial security despite opposition from the banking institutions and the Fed. Meanwhile, Strategy™ has raised $21 billion through stock issuances to expand its Bitcoin portfolio, and has not only highlighted its institutional interest, but also attracted regulatory attention. These developments demonstrate the gradual integration of Crypto into traditional finance with long-term market impacts.

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