Due to the United States officially imposing a 25% tariff on Mexico and Canada on the East Coast time on the 4th, the US stock market and the cryptocurrency market have plummeted across the board in the past two days. However, as the US Commerce Secretary revealed this morning, Trump may announce as early as today that he will provide a buffer for tariffs on goods from Mexico and Canada, and as the President of Ukraine, Zelensky, bowed down and expressed willingness to seek peace under Trump's leadership, the downward trend of the US stock market on Tuesday's close was alleviated.
Bitcoin also jumped 9.1% from the low of $81,501 to a high of $88,948, and was reported at $87,338 at the time of writing, up more than 4.9% in the last 24 hours.
Standard Chartered: The key support level for BTC in the near term is $69,000 - $76,500
However, regarding the short-term trend of BTC, The Block cited the views of Standard Chartered analyst Geoff Kendrick and warned that BTC may test the key support level in the range of $69,000 - $76,500 in the near term, facing potential volatility.
Kendrick emphasized the correlation between BTC and major stock indices in the report, pointing out that broader market trends will affect cryptocurrency prices, especially the 5% drop in Nasdaq futures that has dominated BTC's recent decline.
Kendrick analyzed that the price range on November 6, 2024 (the day after the US presidential election) is a key potential support level for BTC, estimated to be between $69,000 and $76,500, making it closer to Strategy's (formerly MicroStrategy) average BTC purchase price of $65,000.
He believes that BTC's performance in this range may determine its short-term trend, so this is a key level worth watching.
Analysts: Rebound expected in March
However, some analysts believe that the stock market and cryptocurrency market will see a rebound in March. Cointelegraph reported that the trading firm Mosaic Asset said in its latest report: "Bearish investor sentiment and the breadth of market oversold conditions can help drive a stock market rebound."
"In the short term, the seasonality and cyclical trends of the S&P 500 index may also provide tailwinds. Historically, the last two weeks of February are among the most negative two-week periods for the S&P 500 index, but on average, March is the best-performing month of the first half of the year over the past 15 years."
Julien Bittel, Head of Global Macro Research at Global Macro Investor, also expressed optimism about the potential recovery in March last week. He analyzed:
Everything that is happening in the market, especially in the cryptocurrency market, is a direct consequence of the tightening of the financial environment in the fourth quarter of last year. When financial conditions tighten, liquidity is depleted and the economy unexpectedly begins to slow down. This is why we are seeing weak economic data and why the market is panicking about growth, and the discussion of a recession is now resurfacing.
But all of this will reverse next month. Over the past two months, financial conditions have loosened rapidly - the US dollar has fallen, bond yields have fallen, and oil prices have fallen - laying the foundation for data to rebound soon. Remember, financial conditions are always the driving factor.
With BTC falling to $80,000, this tightening is now fully reflected in its price. Can we go even lower? Of course... But what I'm saying is: everyone is now on the same side of the trade - market sentiment is extremely pessimistic, and BTC's RSI is 23, the most oversold level since August 2023.
