Bitcoin recently fell to a local bottom just above the $91,000 mark, showing its increasing sensitivity to macroeconomic events. As geopolitical tensions rise, particularly surrounding the U.S. trade policies, Bitcoin’s price movements are mirroring broader market reactions. Here’s a closer look at why Bitcoin is facing this downturn, its potential for recovery, and what analysts predict for the future.
On February 3, 2025, Bitcoin’s price fell to a low of $91,530 at 02:00 am UTC, marking a three-week bottom before bouncing back to $95,306 by 8:14 am UTC. According to Cointelegraph Markets Pro, the price correction was primarily influenced by the broader macroeconomic environment, particularly the news of trade tariffs imposed by U.S. President Donald Trump on imports from China, Mexico, and Canada.
The decline came just two days after Trump signed an executive order on February 1, which set the stage for escalating trade tensions. This sharp correction raised concerns about Bitcoin’s growing vulnerability to global economic shifts.
The decline in Bitcoin’s price can largely be attributed to fears of a potential global trade war. As Ryan Lee, Chief Analyst at Bitget Research, explained, “While Bitcoin has historically been viewed as a hedge against traditional market volatility, its recent performance highlights growing sensitivity to global economic events.”
The tariffs have resulted in retaliatory promises from Canada, Mexico, and China, increasing investor anxiety. As a result, there has been a shift away from riskier assets—including cryptocurrencies—towards more traditional safe havens. Lee also noted that Bitcoin’s market reaction demonstrates how “geopolitical tensions and policy decisions are increasingly shaping cryptocurrency market dynamics.”
Despite Bitcoin’s reputation as a “safe-haven” asset during times of traditional market volatility, its recent performance highlights how sensitive the cryptocurrency has become to macroeconomic developments. This shift in behavior is particularly notable given that Bitcoin has often been touted as a hedge against inflation and traditional market risks.
Raoul Pal, founder and CEO of Global Macro Investor, had previously warned in November 2024 that Bitcoin’s price could dip below $70,000 in February, based on its correlation with global liquidity trends. His prediction now seems more likely as Bitcoin’s sensitivity to broader financial conditions becomes apparent.
While Bitcoin’s recent price fluctuations may be worrying, some analysts remain optimistic about its future. Alvin Kan, COO of Bitget Wallet, suggested that Bitcoin still holds potential for a rebound. “While the sell-off reflects a typical risk-off reaction to macroeconomic shocks, Bitcoin’s safe-haven reputation still leaves room for a rebound if digital assets increasingly serve as hedges against inflation and currency devaluation.”
Kan’s perspective aligns with predictions that Bitcoin may see a recovery as digital assets gain wider recognition as inflation hedges. Despite the concerns surrounding short-term market corrections, such as the $36 trillion U.S. debt ceiling, many in the industry remain confident about Bitcoin’s prospects for the remainder of 2025.
Looking beyond the immediate market turbulence, analysts are predicting a strong performance for Bitcoin in the long term. Some market watchers are forecasting Bitcoin’s price to soar to between $160,000 and $180,000 by the end of 2025. While the current economic climate presents challenges, Bitcoin’s underlying fundamentals as a hedge against inflation and store of value could drive significant upward momentum in the coming months.
Bitcoin’s recent dip highlights the increasing impact of global economic events on the cryptocurrency market. With concerns over a potential trade war and broader macroeconomic instability, Bitcoin’s typical behavior as a hedge against market volatility has been put to the test. However, many analysts remain optimistic about a potential rebound, with predictions for Bitcoin to reach new highs later in 2025. As always, investors will need to stay vigilant and keep an eye on the broader market trends shaping the future of cryptocurrencies.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up