Bitcoin suffered severe setbacks in recent weeks, falling to a temporary low of $76,700. The price has since recovered by several thousand dollars and is now trading at nearly $84,000. Investors are now hoping that the worst of the storm is over. According to pseudonymous analyst DarkFost, the recent correction was “essential” for Bitcoin to continue its bull run.
This storm was essential
“One could view this as a natural market shakeout—an essential phase for the continuation of an uptrend. Looking at historical patterns, every previous deleveraging phase like this one has provided opportunities for short- and medium-term development,” the analyst said.
Data from CoinGlass shows that Bitcoin’s open interest (OI) fell from $61.42 billion to $49.71 billion between February 20 and March 4. This corresponds to a decline of 19% in the derivatives market and confirms the market consolidation described by DarkFost in the figures.
This decline followed price volatility triggered by uncertainty surrounding Donald Trump’s policies – particularly regarding import tariffs, but also on a geopolitical level.
“Due to the recent panic caused by political instability combined with Donald Trump’s decisions, there was a massive liquidation of leveraged Bitcoin positions,” DarkFost explained.
Bitcoin Lost Two Crucial Levels
Within a short period of time, Bitcoin broke through two crucial support zones during the decline. First, the $90,000 mark fell, followed shortly thereafter by a price drop below $80,000.
The market’s focus is now on the U.S. Federal Reserve, which will announce its next interest rate decision on Wednesday. The focus will be less on the actual interest rate level, which is likely to remain unchanged, but rather on Jerome Powell’s statements.
Will he speak pessimistically about the economy and suggest further interest rate cuts? Or will it dampen recession fears, which could cause interest rates to rise again?
The coming days will tell. Until then, the market is likely to adopt a wait-and-see attitude.
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