Bitcoin and Macro Pressure: What Now?

Mar 12, 2025

Hello everyone,
The market is in rough shape, but inflation came in lower than expected, so we might finally see some green for a few days.

Bitcoin has touched $84,000, but its recent weakness appears to be heavily tied to broader economic factors. Recession fears, the tech stock sell-off, and the drop in the S&P 500 have pushed Bitcoin into an unusual pattern. But what does this all mean?

External Forces at Play

Both the S&P 500 and Nasdaq have seen sharp declines in a short period. Given the size of these pullbacks, it's almost surprising that Bitcoin has held up as well as it has. In fact, despite major sell-offs in equities, Bitcoin managed to hold its ground for a few days before eventually slipping below $80,000. Now that equities are in the green, we see Bitcoin already in the mid-$80,000s.

This suggests that Bitcoin's move isn't purely a reflection of its own cycle but is being shaped by external pressure. The equity markets need to stabilize before Bitcoin can make a meaningful recovery.

Short-Term Outlook

Looking at the S&P 500 from a broader perspective, it recently reached a level not seen since September 2024.

Given the size of the correction (down 10% within 14 trading days), it’s normal to see a bounce in equities over the next couple of weeks. A short-term rebound could provide Bitcoin the opportunity to climb back toward its previous range at $90,000. However, the risk remains that equity markets haven’t yet found their true bottom for the year.

If selling pressure continues, Bitcoin is more likely to test its recent lows or even push lower to the low $70,000s.

Strategic Adjustments

At this stage, it's not about panic-selling after a 30% drop but rather reassessing risk. If Bitcoin recovers toward the $90K level, it might be wise to consider a more defensive approach, reducing exposure slightly to hedge against further macroeconomic uncertainty.

My second biggest altcoin holding is XRP. For now, it has held the $2 level and remains even stronger than Bitcoin. If XRP confirms a break below $2, I’m going to cut this position.

As for ETH, it has now broken below the $2,100 level I was watching. It’s now very likely to hit $1,500 while continuing to underperform BTC. Although its long-term fundamentals remain strong (10-year outlook), I would remain cautious in the near future and convert it into Bitcoin.

That’s what I did with my other altcoin positions as well. In this environment, it’s more likely that Bitcoin dominance will resume its uptrend. The goal is to remain exposed to the broader crypto market recovery while minimizing the risk of further downside in assets that are losing strength.

The Bigger Picture

If stocks remain in a downtrend and keep moving lower, it’s unlikely that Bitcoin will reach new highs anytime soon. That said, I still want to give it the benefit of the doubt and see how it responds to the equity bounce.

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Bitcoin's long-term trend remains intact, with the price trading above the 10-day Moving Average and above the 2021 cycle highs. I personally would cut my Bitcoin four-year cycle position if the price starts to break below these levels.