Bear Market Clouds Loom: Is Bitcoin Really Powerless to Recover?

2025.03.10

Bear Market Clouds Loom: Is Bitcoin Really Powerless to Recover?

Traders have pushed back their bets on when the Federal Reserve will begin cutting interest rates, from May to June.

2025.03.10 - 07:51:42

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Traders have pushed back their bets on when the Federal Reserve will begin cutting interest rates, from May to June.

By 1912212.eth, Foresight News

At around 4 PM on March 9, Bitcoin turned downward again, dropping from $86,000 to a low of $80,000. Ethereum also fell from around $2,200 to below $2,000, while SOL dropped from $140 to $124. The broader altcoin market followed the downtrend with significant losses across the board. According to Coinglass data, total liquidations in the derivatives market reached $614 million over the past 24 hours, with $537 million coming from long positions.

Since March, the market fear index has repeatedly fallen below 20—a rare occurrence. Even during mid-2024, such extreme levels of panic were not observed. With prices continuing to decline, is the bull market truly over?

Bitcoin Spot ETFs See Five Consecutive Days of Heavy Net Outflows

The data for Bitcoin spot ETFs is concerning. Since February, there have been multiple days of substantial net outflows, and since early March, five consecutive days of heavy net outflows have occurred.

On March 4, net outflows totaled $143.43 million; on March 6, $134.26 million; and on March 7, an unusually large outflow exceeding $400 million was recorded. Sustained capital outflows clearly weigh on Bitcoin’s price, weakening buying pressure and leading to prolonged downward price action.

For Ethereum spot ETFs, three consecutive days of net outflows have also occurred. Between February 20 and March 7, only March 4 saw a minor inflow of $14.58 million.

Markets Push Back Fed Rate Cut Bets from May to June

The timing and magnitude of rate cuts remain critical to crypto traders. U.S. job growth in February slightly missed expectations, raising questions about labor market resilience amid policy uncertainty. Nonfarm payrolls increased by 151,000, below the forecasted 160,000. Average hourly earnings rose 0.3% month-over-month and 4.1% year-over-year. The unemployment rate edged up to 4.1%. Despite the historically strong labor market, cracks are beginning to show due to chaotic trade policies and significant federal spending cuts that could disrupt economic growth this year. Following the report, short-term interest rate futures traders shifted their expectations for the first Fed rate cut from May to June—though they still anticipate three rate cuts in total during 2025.

Christopher Waller, a highly influential Federal Reserve governor, stated he would not support a rate cut in March but believes two or even three cuts could occur this year. Speaking at The Wall Street Journal's CFO Network Summit, Waller emphasized his desire to see more data on the economy's condition before further easing, particularly given the shifting trade policies under the Trump administration.

After cutting rates by a cumulative 100 basis points in the final months of 2024, the Fed held steady in its January meeting. Markets widely expect the Federal Open Market Committee (FOMC) to remain on hold during its March 18–19 session. Several Fed officials have indicated they want to see more evidence of cooling inflation before considering another rate cut.

Government Reserve Hype Fizzles, White House Summit Lacks Substance

On March 7, Trump signed a high-profile executive order officially establishing a U.S. "strategic Bitcoin reserve." This move fulfilled part of his campaign promise to integrate Bitcoin into national financial strategy. However, David Sacks, the White House lead on AI and crypto affairs, quickly tempered enthusiasm with a clarifying statement: "The government will not purchase additional assets for this digital asset reserve beyond those acquired through criminal or civil asset forfeiture proceedings."

The market's initial optimism—expecting government accumulation—turned into disappointment. Prices began declining soon after. Attention then quickly shifted to the upcoming White House crypto summit.

The summit brought together key figures from the crypto industry, including venture capitalists, prominent project founders, and exchange CEOs. Attendees took turns speaking, but most remarks consisted of praise for Trump and his administration's progress in the crypto space.

The only notable takeaway came from Trump himself, who said he expects Congress to pass stablecoin legislation before the August congressional recess.

The gap between high expectations and minimal substance led to growing market pessimism. BTC, which stood near $90,000 when the summit began in the early hours of March 8, started a steady decline afterward.

Outlook on Future Price Movements

Market sentiment on future price direction remains divided. Trader Eugene Ng Ah Sio stated in a Telegram group that he isn't rushing to enter trades at current levels. He reiterated that the only level he is currently watching is $75,000.

Jacob King, founder of WhaleWire, posted that Bitcoin’s bear market has already begun. The failed launch of the strategic Bitcoin reserve clearly shows that no purchases beyond seized coins were ever intended. Meanwhile, the narrative of institutional demand has collapsed—evidenced by record-breaking ETF outflows. All narratives have now been shattered—one after another. Bitcoin maximalists attracted retail investors into the bubble through illusion, but their playbook is now empty. Bitcoin is heading into a multi-year bear market, falling toward levels once thought impossible. If you're invested, I strongly advise selling everything now—and if you wish, buy back in after an 85%+ drop.

Jeff Park, Head of Investment Strategy at Bitwise, said: "At this stage, I believe we’ll go lower before breaking to new highs. I always hope I’m wrong—but that’s the lonely and thankless nature of alpha trading, and why you follow me."

Mike Novogratz, founder of Galaxy, tweeted that BTC needs to reclaim $91,000 to attract momentum buyers. Until then, the chart remains in a $75K–$90K range. For the rest of the crypto market, retail participation will be key. But I know one thing—every time you think they’re gone, they come back. That’s what we need to see for a market reversal. ETH must hold $2,000—and it absolutely must hold. Medium to long term, the outlook remains very bullish. But in the short term, many countervailing forces are at play.