Bitcoin (BTC) Dips Below $84,000 as U.S. Market Enters Correction

Friday saw the cryptocurrency market take a big dip that wiped out most of the value accrued over the week. Bitcoin (BTC) trading volumes in the vicinity of $88,000 dropped to $83,800

Friday saw the cryptocurrency market take a big dip that wiped out most of the value accrued over the week. Bitcoin (BTC) trading volumes dropped to $83,800, representing a 3.8% loss over 24 hours. The S&P 500 fell 2%, and the Nasdaq lost 2.8%.

Crypto-exposed stocks had deeper declines, with MicroStrategy (MSTR,) the largest corporate Bitcoin holder, down 10% and Coinbase (COIN) down 7.7%. According to the latest data from the U.S. Bureau of Economic Analysis, the personal consumption expenditures (PCE) price index fell 2.5% year-over-year in February, while the core inflation index, which excludes volatile food and energy components, rose 2.8%.

Both figures exceeded economists’ expectations in a survey by Dow Jones. Economists polled by Benajmin Grant of the LMAX Group expected the PCE price index to rise 2.4% and the core inflation index to increase 2.7%.

The report also revealed a 0.4% rise in consumer spending, which fell short of the anticipated 0.5% increase. Economists expected spending to increase by 0.5%, following January’s 1.1% surge, which was later revised to show a 0.1% decrease.

Moreover, February’s consumer spending numbers showed weak economic growth. The report highlighted a 0.3% rise in the index of goods, which can be attributed to a 1.8% increase in durable goods orders, exceeding the predictions of a 0.8% rise. However, the index of services saw a slight decrease of 0.1%, falling short of the anticipated 0.2% increase.

The cryptocurrency market is continuing to experience volatility as Bitcoin’s price fell to $84,000.

The fall to this level was partly expected because of the CME futures gap that occurred earlier this week at $83,800. Traditionally, BTC tends to return to these gaps, so this pullback was to some extent expected.

However, Bitcoin’s close correlation with the Nasdaq also means that continued stock market falls could lead to further losses for crypto.

Even amid volatility, some analysts point to evidence of resilience. Figures from Santiment indicate that while international stock markets, including the S&P 500, experienced sharp drops amid fears of inflation and tariffs, Bitcoin still recorded a modest weekly gain, trading around $84,300.

This points to crypto’s increasing decoupling from traditional financial markets, a far cry from its high correlation during the 2022 bear market.

Some people remain hopeful that Bitcoin will perform well in the long run, especially with the recent report from the U.S. Bureau of Labor Statistics showing an unexpected rise in the PCE price index.

According to Joel Kruger, a strategist for the LMAX Group, increasing crypto adoption and the greater interest from larger financial institutions will ultimately help recover price increases. There is cutting volatility but he says there is plenty of solid support on Bitcoin in the $70,000 -$75,000 range, indicating the possible upside later this year.

On the other hand, crypto expert Michaël van de Poppe cautions that Bitcoin is losing steam and that critical liquidity levels, specifically the 4,000 level, are at risk of falling below.

If BTC cannot hold the support, it may have to continue falling. Van de Poppe envisions another week of fall before the market settles down, with the potential to have a recovery in Q2.

As Bitcoin and the overall crypto market remain under pressure, investors are watching key support and economic indicators for the next market-moving direction.