Bitcoin and Unexpected Fluctuations in February: Analysis of Causes and Recovery Prospects

Bitcoin, after a period of being in the spotlight with a record high price of $109K in January, has experienced turbulence as its price sharply declined in February. Currently, after a 1.11% decrease in the past 24 hours, the price of this digital currency is stabilizing at around $96,148. So what is the reason behind this decline? Is it just a temporary pause before entering a new phase of price increase, or are there deeper factors affecting the market? This article will analyze these factors in detail.

1. Factors Contributing to the Decline of Bitcoin a. Global Political Impact One of the main reasons for the decline in Bitcoin prices is the fluctuations in the global political context. For example, trade wars and tariff policies between the US, China, and Canada have had a clear impact on the market. According to some analysis, such tough measures have contributed to a 9% decrease in Bitcoin since the beginning of February, making investors more cautious. b. Failure to Update from Bitcoin Reserve At the beginning of January, the plan from Bitcoin Reserve created a positive wave, pushing the price of Bitcoin up. However, as updates related to this plan became quiet, the market reacted negatively. The lack of transparency and support information has led to a decrease in investor confidence, contributing to the price correction. c. Pro-Crypto Initiatives From US Senate Banking Subcommittee Despite efforts from legislative bodies such as the US Senate Banking Subcommittee to promote initiatives supporting the crypto industry, the positive impact on the price of Bitcoin does not seem to materialize as expected. This indicates that until policies are finalized and enforced clearly, the Bitcoin market may continue to maintain a 'consolidation' state (.
2. Halving Cycle and Post-Event Endurance a. Expectations for the price increase after Halving History shows that Bitcoin often experiences a significant increase after halving events, when mining rewards are halved. However, the recent halving seems to have not brought the expected price boost. Instead, the market is currently in a prolonged correction phase of 3-4 months, similar to previous cycles, as Bitcoin consolidates after reaching its peak before major events such as the 2024 US presidential election. b. Legal Regulatory Barrier One of the main factors that makes investors cautious after the halving is the legal regulations. According to former US Congressman Patrick McHenry, although crypto-friendly laws are being discussed, the actual changes may take up to 18-20 months to be implemented. This uncertainty has caused many investors to gradually withdraw and wait for clarity from the government.
3. Politics and Its Impact on the Crypto Market a. Support Initiatives from Trump and Governance Policies Recently, Trump has issued several executive orders to support the crypto industry, creating hope for a price surge. However, as experts have pointed out, the impact of these policies will only truly materialize when key positions are appointed and specific legislation is enacted. Until then, Bitcoin may continue to maintain a narrow range of fluctuations.
4. Meme Coin Market: Temporary Excitement and High Risk a. Recovery And Sudden Collapse While Bitcoin is struggling, the meme coin market - virtual currencies inspired by social media phenomena - is attracting attention with promises from famous figures like Kanye West. However, the reality is that the meme coin market has lost over 44 billion USD in just the past three weeks. A typical example is Trump Coin, which has plummeted by 80% in just 15 days, evidence of the strong volatility and high risk of this type of asset.
5. Prospects for Recovery and Key Price Milestones Despite the market being in a correction phase, many experts still predict that Bitcoin has the potential to make a strong recovery in the coming months. Based on past halving cycles, Bitcoin could increase by around 40%, reaching a price range of 130K to 150K USD. Some factors that could drive the recovery include: Strong ETF capital flow: ETF funds such as BlackRock have recorded a profit increase of 2.3 billion USD in 2024, contributing to enhancing investor confidence. "Golden Cross" milestone at 106K USD: Surpassing this price level could be seen as a sign of a new price surge, as the short-term moving average crosses above the long-term moving average. In the context of these positive factors, Bitcoin may undergo a recovery phase after stagnation, however, the market always has uncertainties and risks that cannot be ruled out. Conclusion Overall, the decline of Bitcoin in February is not only a result of short-term fluctuations, but also reflects the far-reaching impacts from global politics, lack of updates from major organizations, and investors' expectations for regulatory changes. Meanwhile, trends in the halving cycle and strong ETF capital inflows are opening up prospects for recovery, as key price levels such as the “golden cross” could trigger a new wave of price increases. Despite the always volatile crypto market, closely monitoring macroeconomic factors and political developments will help investors have a more comprehensive view of the risks and opportunities in the future. With detailed analysis like this, hopefully investors will have more information to make informed decisions in the ever-changing market environment.