Bitcoin’s price recently dipped below $63,000, driven by poor US economic indicators, stock market instability, and concerns regarding a potential bubble in the artificial intelligence sector. The question arises whether Bitcoin can recover to $90,000 by March.
Key Takeaways:
- Bitcoin’s decline has been influenced by disappointing US job data and rising apprehensions about investments in AI.
- Currently, options markets suggest a mere 6% likelihood of Bitcoin rebounding to $90,000 by March.
Bitcoin (BTC) fell below $63,000, marking its lowest point since November 2024, and has experienced a 30% decline since its unsuccessful attempt to surpass $90,500 on January 28. The ongoing bearish trend is fueled by worrying employment data in the US and escalated fears about significant financial commitments within the AI field.
Options traders are indicating only a 6% probability of Bitcoin reclaiming $90,000 by March, as per current market data. On the Deribit exchange, the cost of a call option to purchase Bitcoin at $90,000 by March 27 is priced at $522, reflecting skepticism about a substantial upswing. Meanwhile, a put option, allowing the sale of Bitcoin at $50,000 for the same date, is quoted at $1,380, which indicates a deeper potential decline of about 20%.
Quantum Risks and Selling Pressure
Investors are diminishing their cryptocurrency holdings due to emerging quantum computing threats and fears of forced liquidation among firms carrying substantial Bitcoin reserves, generally financed through debt and equity. Recently, Christopher Wood, the global head of equity strategy at Jefferies, withdrew a 10% Bitcoin allocation from his portfolio, pointing out the risk posed by quantum computers that might reverse-engineer private keys.
Market sentiment has weakened significantly, driven by external factors. Even silver, the second most significant asset by market capitalization, recently saw a 36% plunge in its price after reaching a historic high of $121.70 on January 29.
Bitcoin’s downturn to $62,300 reflects widespread uncertainty about economic growth and employment in the US, making a swift recovery to $90,000 unlikely in the near future.
This article does not provide investment advice. Readers should perform their own research to make informed decisions regarding investment and trading.
