Bitcoin price remained stable above $95,550 despite a significant retreat in popular American stock indices and exchange-traded funds. As of Saturday morning, Bitcoin (BTC) was trading above $96,550, showing resilience in the face of a market downturn.
The S&P 500 index, a blue-chip indicator, experienced a 1.71% decline, while the tech-heavy Nasdaq 100 fell by 2%, erasing 455 points. Additionally, the Dow Jones and the small-cap-weighted Russell 2000 saw declines of 1.70% and 3%, respectively. The Schwab US Dividend Equity ETF, known as SCHD, also fell by 0.5%, tracking some of the largest value stocks in the US.
Many technology stocks, including Nvidia, Apple, Microsoft, and Meta Platforms, were among the top losers during this downturn. The fear and greed indices reflected the market sentiment, with the CNN Money fear index at 35 (in the fear zone) and the crypto fear and greed index at 38 (in the greed area).
The market volatility can be attributed to concerns surrounding President Donald Trump’s tariffs and the Federal Reserve’s monetary policy. The Fed’s recent minutes indicated a preference for maintaining a restrictive policy due to elevated inflation levels. Data from January showed a rise in both the headline and core consumer price index, moving further away from the 2% target.
Bitcoin and other cryptocurrencies tend to perform well in a dovish Federal Reserve environment. The market saw a decline in 2022 when the bank raised rates but rebounded between 2023 and 2024 as the bank shifted its stance. Investors are also wary of escalating tariffs, with Trump already implementing tariffs on Chinese imports and considering levies on European goods.
Despite the market uncertainties, there are positive indicators for Bitcoin’s price trajectory. The weekly chart suggests a bullish flag pattern formation, typically leading to a strong breakout. Additionally, a cup-and-handle pattern has emerged, with a price target of around $121,590 based on the cup’s depth.
Overall, while market risks and uncertainties persist, there are optimistic signals for Bitcoin’s price performance in the near future. Investors will be closely monitoring developments in the stock market, Federal Reserve policy, and trade relations to gauge the cryptocurrency’s trajectory.