Bitcoin is experiencing its second-worst February on record, with its price impacted by ongoing macroeconomic challenges and a necessary technical correction.
Currently, Bitcoin (BTC) has plummeted 25% from its January 20 all-time high of $108,786, as rising inflation indicators have led to a risk-off sentiment among investors, compounded by significant outflows from spot exchange-traded funds.
Despite the U.S. Core Personal Consumption Expenditures price index data aligning with analyst expectations—falling to 2.6% from 2.9% year-over-year—BTC only saw a minor increase, briefly reaching $81,800.
The leading cryptocurrency by market cap initially dipped to $78,400, marking a loss of over 6% within 24 hours and establishing a three-month low.
Analysts indicate that this is the first significant correction since Bitcoin reached its all-time high less than six weeks ago. This adjustment is said to be largely technical, exacerbated by external factors.
Potential for Further Bitcoin Decline
Analysts predict continued volatility for Bitcoin, citing technical analysis support and resistance indicators. They emphasize that if BTC approaches the 3-Month Simple Moving Average (SMA) support at $71,880 without rebounding towards the $80,000 mark, a less favorable outlook may arise, increasing the risk of further declines.
Market predictions suggest Bitcoin could retest levels around $69,000 by early March. Data reveals significant accumulation between $60,000 and $72,000, indicating a potential barrier against deeper declines, with over six million addresses acquiring 2.64 million BTC in that price range.
