Bitcoin has seen a price drop in recent weeks, sparking concerns among investors as it struggles to maintain momentum. With Bitcoin trading at around $84,975.03 (a 7.01% gain), the cryptocurrency has encountered a correction that analysts suggest could extend until April 2025. The recent struggles can be attributed to several macroeconomic factors, including a strengthening US dollar and shifting central bank policies.

Bitcoin’s Struggles Amid a Stronger US Dollar

Bitcoin’s price decline follows a broader trend in financial markets. The US dollar has gained strength due to tighter liquidity conditions, which have made risk assets like Bitcoin more vulnerable to downward pressure. The US Dollar Index (DXY) has been climbing, and this has put pressure on Bitcoin, a typical characteristic when the dollar strengthens.

As per Matrixport, the current market correction could be part of a 13-week cycle that has been observed in past Bitcoin price movements. Historically, Bitcoin has seen periodic corrections that align with broader market cycles, and this recent drop fits that pattern.

Macroeconomic Factors and Federal Reserve’s Impact

The Federal Reserve’s monetary policy remains another key element driving Bitcoin’s price action. With inflation expectations on the rise, there is speculation that the Fed will adopt a more hawkish stance, which could further weigh on risk assets like Bitcoin.

There is also an increasing correlation between Bitcoin and traditional financial markets, with Bitcoin becoming more susceptible to broader macroeconomic shifts. This has led to concerns that Bitcoin may face more volatility in the near future, especially with central bank policies tightening.

Mid-April Outlook: A Potential Low Before Rebound

According to Matrixport analysts, mid-April could mark the lowest point of the year for Bitcoin, as the market may experience a deeper correction. This expectation contradicts the prevailing belief that the market will experience a significant rally in the coming weeks. However, even if a rally does materialize, analysts warn that it may be short-lived, leading to a potential bull trap that creates a false sense of market strength.

Following this period of correction, Bitcoin is expected to follow a more natural cycle and begin a healthy recovery, with expected highs in Q3 2025. This cyclical recovery pattern could see Bitcoin move past current price levels and toward new peaks later in the year.

Traders Bet on a Rebound Amid Bearish Sentiment

Despite the bearish outlook, many traders remain optimistic about Bitcoin’s long-term potential. The rise of Bitcoin ETFs has played a significant role in driving investor interest, with $39 billion in inflows since the launch of these funds in early 2024. However, Markus Thielen from 10x Research suggests that much of this investment could be tied to arbitrage strategies rather than long-term holding.

Even though Bitcoin has faced challenges, with the price falling from its election-driven gains, some traders believe that buying the dip is a smart move. According to Santiment data, mentions of “buy the dip” have surged to their highest levels since July 2024, signaling a potential rebound sentiment.

Charles Edwards, founder of Capriole Investment, suggests that the market might be nearing a short-term bottom, which could set the stage for a potential recovery. However, CryptoQuant CEO Ki Young Ju cautions that a drop below $75,000 could significantly alter the current bullish outlook.

Conclusion: Bitcoin’s Near-Term Outlook

Bitcoin remains under pressure as macroeconomic factors weigh on its price. While the immediate future may be marked by continued corrections, traders are keeping a close eye on potential rebound signals. Mid-April could be a pivotal point, with Bitcoin potentially reaching its lowest point of the year before beginning a gradual recovery. As the market reacts to tightening liquidity and central bank policies, Bitcoin’s fate in the short term remains uncertain, but the long-term outlook still holds promise for those willing to weather the storm.