Bitcoin's recent 30% drop to $76,700, fueled by global recession fears and a weak S&P 500, resembles a mid-cycle correction more than a full bear market, supported by stable derivatives markets and a weakening dollar.
On March 11, the price of Bitcoin fell sharply, hitting its lowest point in four months of $76,700, which attracted widespread attention from the market. The decline is backed by the S&P 500's decline by 6% in a week, and stock market adjustments push the index to its lowest level in six months, and investors' concerns about a global recession have increased.
Bitcoin price fell 30% from its all-time high of $109,350, a drop that sparked discussions about whether it entered a bear market. However, some analysts believe that the current price trend is different from previous bear markets. For example, in the November 2021 crash, Bitcoin fell from $69,000 to $40,560, which took 60 days; this adjustment is more similar to the interim correction that fell 31.5% from $71,940 to $49,220 on June 7, 2024.
In terms of market environment, the trend of the US dollar has an important impact on the price of Bitcoin. In the early stages of the bear market at the end of 2021, the US dollar strengthened against a basket of foreign currencies, and the DXY index rose from 92.4 in September 2021 to 96.0 in December 2021. However, the DXY index was 109.2 at the beginning of 2025 and has since dropped to 104. Traders generally believe that Bitcoin is negatively correlated with the DXY index, because Bitcoin is primarily regarded as a risky asset rather than a hedge tool when the dollar is weak. The current weakening trend of the US dollar supports the price of Bitcoin to a certain extent.
The performance of the Bitcoin derivatives market is also an important basis for judging whether this adjustment is over. Despite the decline in Bitcoin’s price, the current annualized premium for futures is still 4.5%, showing a certain optimistic expectation of its future prices. In contrast, after the Bitcoin price crash on June 18, 2022, the annualized premium for futures fell below 0%. In addition, the financing rate of Bitcoin perpetual futures is close to zero, indicating that the demand for leverage between the bulls and bears is balanced. Under bear market conditions, excessive demand for short positions is usually seen, driving financing rates below zero.
Judging from historical data, a 30% price pullback does not necessarily indicate the arrival of a bear market. The Bitcoin market is highly uncertain and volatile, and past price trends cannot fully predict the future. However, multiple key indicators show that the adjustment may be nearing its end. For example, the stable performance of the derivatives market and the weakening trend of the US dollar have provided some support for the rebound of Bitcoin prices.
Despite this, there are still many uncertainties in the market. The risks of a global recession, changes in regulatory policies, and fluctuations in market sentiment may all affect Bitcoin prices. When making decisions, investors need to consider various factors in a comprehensive way and carefully evaluate risks.
Bitcoin returns to the $90,000 path. Although it is due to the weakening of the US dollar, historical data showing that a 30% price pullback does not indicate the bear market, and the resilience of BTC and its derivatives markets, the future trend is still full of variables. Market participants need to pay close attention to macroeconomic data, policy dynamics and changes in market sentiment to cope with possible price fluctuations.
