Bitcoin rebounds above $82,000, is this a market rebound or a reversal?

The global financial market is being manipulated by one person.

As the global tariff war launched by Trump intensifies, market expectations for a US recession are also rising. On March 10, local time, the US stock market suffered a Black Monday, with the three major US stock indexes collectively plummeting. The Dow Jones Industrial Average fell 2.08%, closing down nearly 900 points; the Nasdaq fell 4%, and the S&P 500 fell 2.7%.

The crypto market is no exception. Bitcoin fell below $77,000 to $76,560, a daily drop of more than 8%. ETH performed even worse, falling below $1,800 in a short period of time and hitting a low of around $1,760. In terms of price alone, it has returned to the level of four years ago.

However, as time goes by, the market seems to have started to pick up, with Bitcoin recovering to $82,000, correcting its decline, and ETH also rising by more than $1,900.

The external environment is volatile, and the market is full of doubts as to whether this wave of growth is a short-term rebound or a reversal signal.

Trump is the reason for both success and failure. This is not only true in the crypto market, but also in the global financial market. To talk about the current round of crypto market decline, we must start with Trump.

I vaguely remember that in the months before the election, global financial markets were actively responding to the "Trump" trading theme. Investors were betting wildly on Trump's deregulation, tax cuts, immigration and other policies. U.S. stocks, the U.S. dollar and Bitcoin soared across the board, and the 10-year U.S. Treasury yield once quickly rose by 60 basis points. Small-cap stocks responded significantly. On the second day after the election, the Russell 2000 index, which represents small-cap stocks in the United States, rose 5.8%, the largest single-day increase in nearly three years. From election day to before Trump's inauguration, the U.S. dollar index rose by about 6%, and in Trump's first month in office, the S&P 500 rose by 2.5%, and the Nasdaq index, which is dominated by technology stocks, rose by 2.2%.

It can be seen that the market has strong optimistic expectations for Trump's inauguration, but the facts have proved that Trump has brought not only a big rise to the financial market, but also signals of economic recession.

From the perspective of the United States, the indicators are complex. In February, non-farm employment increased by 151,000, slightly lower than market expectations; the unemployment rate was 4.1%, compared with 4% in the previous period. Unemployment is still controllable and can even be considered good, but inflation remains high. The final value of the expected one-year inflation rate in the United States in February was 4.3%, the highest since November 2023. From the perspective of the consumer market, the February consumer expectations survey data released by the Federal Reserve Bank of New York showed that consumers' expectations for inflation in one year increased by 0.1 percentage points to 3.1%; the proportion of households expecting a deterioration in their financial situation in the next year rose to 27.4%, the highest level since November 2023.

In this context, many institutions have begun to predict a recession in the United States. The latest forecast released by the Federal Reserve Bank of Atlanta on the 6th shows that the US GDP is expected to shrink by 2.4% in the first quarter of this year. The forecast model of JPMorgan Chase shows that as of the 4th, the probability of an economic recession in the United States has risen from 17% at the end of November last year to 31%.

The reason for this series of data has a lot to do with the policies adopted by Trump. After all, the president's recent way of making money is simple and too crude - tariffs. As early as February 1, Trump signed an executive order to impose a 10% tariff on American goods and a 25% tariff on Mexico and Canada, marking the beginning of the tariff war. But as Mexico and Canada both gave in, Trump waved his hand and said that the tariffs would be postponed for one month. Just when the world believed that there was still room for negotiation on tariffs, on February 27 local time, Trump announced on social media that the decision to impose a 25% tariff on Canadian and Mexican products would take effect as scheduled on March 4, and an additional 10% tariff would be added to China.

This time, in addition to China being unfaithful, Canada and Mexico were also completely irritated. On February 27, the Canadian Prime Minister responded strongly that he would impose retaliatory tariffs on the United States, and Mexican President Sheinbaum also stated that Mexico must take countermeasures. On March 6, Trump, who was about to get out of his rut, signed an executive order again to adjust the tariff measures on the two countries, exempting imports that meet the preferential conditions of the US-Mexico-Canada Agreement from tariffs. And just yesterday, the absurd White House call sounded again. Trump announced that he would impose an additional 25% tariff on Canadian steel and aluminum, and then he said that he would not impose an additional tariff. It really showed what it means to put negotiations on the table.

In fact, Trump's inauguration was not a good time, at least for the president, as his predecessor Biden left behind a big mess. In addition to the accumulated historical baggage, the $36 trillion national debt, the high $1.8 trillion federal budget deficit, there are also 42,000 federal employees working from home, a large number of illegal immigrants, unsustainable judicial reforms, and external sanctions against Russia that continue to expand.

Faced with the mess, Trump had to make drastic reforms, and increasing revenue and reducing expenditure became the key. First, he asked his confidant Musk to make a big deal about cutting internal government spending, second, he raised tariffs to generate revenue and reform, and third, he could not let his "poor relatives" suck his blood, which also pointed to the ceasefire between Russia and Ukraine and the increase in EU military spending.

In the long run, a series of combined measures have predictable results: streamlining government agencies can reduce government spending, managing borders can expand the borders of national security, and imposing tariffs can reduce the trade deficit back to the U.S. But reforms often mean bloodshed, and the existence of a painful period is unavoidable. The pain has just begun, and the market can't bear it.

On March 10, when asked if he expected a recession in the United States this year, Trump said he was "unwilling to predict such a thing." Trump said the U.S. government is "bringing wealth back to the United States," but "it will take a little time." Just one sentence quickly brought down the financial market. The three major U.S. stock indexes fell across the board, with the Dow Jones Industrial Average falling 890.01 points from the previous trading day, a drop of 2.08%; the S&P 500 fell 155.64 points, a drop of 2.70%; and the Nasdaq Composite fell 727.90 points, a drop of 4.00%. Fanng fell sharply by 4%, and Tesla's stock price fell by more than 15%.

The crypto market also saw a sharp drop, with Bitcoin falling 8% to $76,000, and ETH falling below the $2,200 level that was said to have been maintained for four years, returning to $1,800. The altcoin market plummeted, and the total market value of the crypto market fell below $2.66 trillion. Wall Street institutions have entered emergency shelter mode. On March 10, the Bitcoin spot ETF had a total net outflow of $369 million, which has continued for six consecutive days; the Ethereum spot ETF had a total net outflow of $37.527 million, which has continued for four consecutive days.

But the good news is that all currencies are gradually recovering. The total market value of cryptocurrencies has slightly rebounded to 2.77 trillion US dollars, a 24-hour increase of 2.5%, and Bitcoin has returned to above 83,000 US dollars. The question arises from this: is this recovery a short-term rebound or the eve of a reversal?

It is clear that the price trend of Bitcoin and even the crypto market are closely related to the US economic indicators, and the current market is actually quite similar to the US state, at the junction of bull and bear markets. On the one hand, the US has a solid private sector balance sheet, the leverage ratio of the US household sector is at a historically low level, and the unemployment rate is relatively good; but on the other hand, the CPI remains high, and the cost of food, housing and other items has become the most important economic issue in the United States. The recent surge in egg prices threatens the entire country; the US economic growth momentum is also insufficient, AI is being repriced, and the craze for the seven sisters in the US stock market continues to ebb.

The same is true for the crypto market. On the one hand, the price of Bitcoin exceeding $80,000 and the strategic reserve of Bitcoin, coupled with the foreseeable relaxation of regulations, make it difficult for people to consider this as a bear market. But on the other hand, the decline in market growth momentum and liquidity is real, and the copycat market is wailing.

Therefore, to see the price, we still have to go back to the United States and Trump. There is a voice in the market that Trump is artificially creating a recession because he forces the Federal Reserve to cut interest rates to reduce the cost of interest payments. This statement also has conspiracy theory elements. After all, as the president, he certainly hates economic recession more than he likes it. But it has to be admitted that the current economic recession warning has raised expectations for interest rate cuts, and the market generally believes that there will be an interest rate cut in June. If the interest rate cut is successful and quantitative easing is adopted, combined with relatively strong asset-liability fundamentals, the United States will usher in a reshaping of the business cycle after the collapse of rituals and music. Of course, the possibility of recession is not ruled out.

In the short term, tariffs and economic uncertainty will continue to increase. Before the macro market improves, it is difficult for the crypto market to usher in a real so-called reversal. From the current situation, despite the frequent positive news, the voices of Trump and others have been difficult to affect the crypto market, and the market's self-sustaining ability is weak, requiring the injection of external liquidity rather than any verbal policy benefits.

In a non-recessionary scenario, the maximum possible drop of Bitcoin is to return to the price before Trump took office, which is the entry price of most institutions before, which is around $70,000. However, in a recessionary scenario, the price may fall sharply. If we look at the S&P 500, when a recession occurs, the S&P 500 falls between 20% and 50%, and Bitcoin may also experience an extreme drop. Of course, for now, there is no need to panic. The area where BTC market chips are dense has not been broken, and it is still between $90,000 and $95,000, indicating that investors in the area have not frequently changed hands.

According to the current situation, since the White House Crypto Summit and the Bitcoin Strategic Reserve have not ignited market sentiment, the possibility of major positive events in the next three months has significantly decreased. Unless the macro environment gradually improves, the market will lack growth momentum. Considering the safe-haven properties of Bitcoin, Bitcoin may move from a small level to a large-scale volatile growth market with a year-long cycle. However, the altcoin market is likely to be not easy. Except for the head currencies and the staged narrative of American manufacturing, other currencies are difficult to grow.

Of course, in the long run, most industry insiders are still optimistic about the market. For example, Arthur Hayes, although he has been saying that Bitcoin may fall to $70,000, he has always insisted that Bitcoin will reach a million dollars in the long run. Messari researcher mikeykremer also wrote that Bitcoin may eventually reach $1 million, but before that, it needs to face a severe bear market. Buying data is also quite optimistic. CryptoQuant analyst Cauê Oliveira revealed that whales have accumulated more than 65,000 BTC in the past 30 days. Joel Kruger of LMAX Digital is more optimistic, saying that Bitcoin is close to bottoming out and is expected to rebound in the second quarter.

But no matter what, under the market dominated by external economic situation, tariffs, inflation and geopolitics will all affect the crypto market. For investors, there is nothing to do but wait.