Bitcoin continued its downward trajectory on March 10, edging closer to a four-month low as broader market conditions fueled selling pressure. The flagship cryptocurrency fell by approximately 4% on the day, dipping to $79,170 on Bitstamp, reflecting a continuation of recent weakness across risk assets.
Market Volatility Weighs on Bitcoin
The downturn coincided with a notable slump in U.S. equities, with the S&P 500 and Nasdaq Composite dropping 2% and 3.5%, respectively, at market open. The sell-off appeared to be driven by investor caution amid concerns over economic policy shifts.
Analysts pointed to spending cutbacks by the Department of Government Efficiency (DOGE) as a contributing factor. “While much attention is on the ongoing trade tensions, the impact of reduced government spending should not be overlooked,” noted The Kobeissi Letter, a financial research platform. The firm emphasized that government spending and job growth had been critical drivers of the economy, and cuts in these areas could have far-reaching consequences.
Crypto Market Faces Mounting Pressure
The broader cryptocurrency market has felt the impact, shedding nearly $1 trillion in market capitalization over the past two months. Bitcoin, which had previously rallied on optimism surrounding the U.S. Strategic Reserve, has now erased those gains.
Traders remain divided on the next major support level for Bitcoin. Some are eyeing technical indicators for potential signs of a reversal. Analyst Rekt Capital suggested that investors watch for a bullish divergence in the relative strength index (RSI). “If Bitcoin forms lower lows in price but higher lows on the RSI, we could see a bullish divergence emerge,” he explained.
Key Technical Levels to Watch
Historical trends indicate that Bitcoin has found support when the daily RSI falls below 28. Past instances have shown that at such levels, Bitcoin either establishes a bottom or remains within a narrow range of -2% to -8% from a local low. As the market digests ongoing macroeconomic developments, traders will be closely monitoring these signals for potential stabilization.
With Bitcoin’s price increasingly tied to broader financial conditions, market participants remain on high alert for further policy shifts that could dictate the next phase of its trajectory.
