Crypto Daybook Americas: Navigating Bitcoin's Downturn — Opportunity or Cause for Alarm?

By James Van Straten (All times ET unless specified otherwise) When considering bitcoin's recent price fluctuations, two contrasting investment strategies come to mind. The first is to 'buy into weakness,' while the second advises against 'catching a falling knife.' The question is, which approach is more applicable in today's market, following the largest cryptocurrency's steepest three-day decline since the collapse of FTX in 2022? This downturn has left BTC 25% below its January all-time high, despite the pro-crypto stance of President Donald Trump's administration. The largest hack in crypto history has understandably shaken investor confidence, compounded by the memecoin frenzy that has diverted liquidity from the broader market. However, it's worth noting that in previous market cycles, bull-market corrections have led to bitcoin plummeting as much as 35%. Given that BTC hasn't experienced a significant pullback since the unwind of the yen carry trade last August, the current situation can be seen as relatively normal. Research by CoinDesk has shown that bitcoin was trading within an extremely narrow range for a considerable period, making a breakout inevitable. On-chain data indicates that bitcoin recently rebounded off its 200-day moving average, approximately $81,800. While short-term holders are selling at the highest level since August, possibly due to panic, because they have held BTC for 155 days or less, they are often viewed as a signal of market capitulation. BlackRock's IBIT saw record outflows on Wednesday, but not all news is negative. A significant expansion deal was secured for Core Scientific (CORZ), and MARA Holdings (MARA) reported strong earnings, with both stocks rising more than 10% before the open. Meanwhile, NVIDIA (NVDA) exceeded fourth-quarter estimates, calming investor nerves. Remain vigilant. What to Watch: Token Events, Conferences, Token Talk by Shaurya Malwa, Derivatives Positioning, Market Movements, Bitcoin Stats, Technical Analysis, Crypto Equities, ETF Flows, Spot BTC ETFs, Spot ETH ETFs, courtesy of Farside Investors, Overnight Flows, Chart of the Day, and While You Were Sleeping, In the Ether.