By Chris Hollingworth 
Bitcoin (BTC) recently experienced a significant drop to a four-month low of $76,700 on March 11, in the midst of a 6% weekly decline in the S&P 500 index. This stock market correction sent the index to its lowest level in six months as investors factored in the increased likelihood of a global economic downturn.
Despite Bitcoin’s 30% decline from its all-time high of $109,350, there are indications that the correction may have run its course. Some analysts suggest that Bitcoin has entered a bear market, but the current price action differs notably from the November 2021 crash that saw a 41% drop from $69,000 to $40,560 in just two months. A similar scenario today would project a decline to $64,400 by the end of March.
The ongoing correction mirrors a 31.5% drop from $71,940 on June 7, 2024, to $49,220 over 60 days. In late 2021, during the bear market, the US dollar was strengthening against a basket of foreign currencies, as indicated by the DXY index, which rose from 92.4 in September 2021 to 96.0 by December 2021. However, in 2025, the DXY started at 109.2 and has since fallen to 104, suggesting an inverse correlation between Bitcoin and the DXY index.
The current market conditions do not show signs of investors moving to cash positions, which has been supportive of Bitcoin’s price. The Bitcoin derivatives market remains stable, with a 4.5% annualized premium on futures despite a 19% price drop between March 2 and 11. The perpetual futures funding rate is close to zero, indicating balanced leverage demand between longs and shorts.
In the broader market, several large publicly traded companies have seen significant declines from their all-time highs, reflecting bearish sentiment in sectors like artificial intelligence amid growing recession fears. Traders are monitoring the potential impact of a US government shutdown on March 15, with concerns surrounding key points of contention in proposed legislation.
Early signs of a real estate crisis could lead to capital outflows into other scarce assets, potentially benefiting Bitcoin. Recent data indicates a decline in home contract signings and a rise in delinquent Federal Housing Administration-insured loans.
In conclusion, the path for Bitcoin to reclaim $90,000 is influenced by factors such as a weaker US dollar, historical evidence suggesting that a 30% price correction does not necessarily indicate a bear market, stability in BTC derivatives markets, concerns about government shutdown risks, and early indications of a real estate crisis.
Please note that this article is for informational purposes only and does not constitute investment advice.
