Dispatch #233: Bitcoin’s correction: the hurdle before the race

Market cast

Bitcoin awaits the macroeconomic spark

Bitcoin is recalibrating below $90,000, breaking its recent range, and returning to mid-November levels. Post-election momentum has cooled amid President Trump’s tariff moves and concerns about inflation, with ETF outflows and cautious sentiment.

Currently, Bitcoin has secured robust support in the $86,000 to $87,000 zone. Should this support level hold, market dynamics suggest a potential rebound toward the $95,500 to $96,500 region, which may pave the way for a subsequent test of the 100K price level.

From a technical perspective, the daily Relative Strength Index (RSI) is approaching the oversold threshold of 30, while analysis of the Bollinger Bands indicates that prices are trading below the lower band, collectively reinforcing the current bearish sentiment.

The big idea

The four hurdles before Bitcoin’s next leg-up

On Dispatch, we often discuss volatility in anticipation of the next leg-up in the rally that kicked off in late 2024. The question thus looms large: could this recalibration be a momentary setback before another surge? Bitcoin now faces several external hurdles that it must overcome to reignite its rally:

Inflation & interest rates

Despite a resilient U.S. economy, persistent inflation is testing the Fed’s ability to engineer a soft landing. While aggressive rate hikes could stifle growth and weigh on Bitcoin, rising inflation may also bolster its appeal as a hedge against currency devaluation.

Tariff turbulence

New U.S. tariffs on key trading partners may lead to shifts in economic activity and impact labor markets. If these protectionist measures don’t yield the expected results, the administration might pivot toward trade deals instead—potentially shifting economic sentiment.

ETF flows & market sentiment

Bitcoin ETFs have seen outflows over the past few consecutive days, reflecting cautious investor sentiment amid global trade tensions and monetary policy developments. However, long-term institutional holders remain engaged, suggesting that short-term sell-offs may not fully reflect Bitcoin’s broader investment appeal.

Reserve asset speculation

ETF flows may be muted for now, but discussions about Bitcoin’s potential role as a reserve asset are gaining traction. Some U.S. states are reportedly exploring ways to integrate Bitcoin into their financial frameworks, hinting at a broader shift in institutional and governmental perception.

The Big Idea? Amid heightened caution and shifting sentiment, history reminds us that when there's blood on the streets, this often sets the stage for robust recoveries. With Bitcoin testing key levels and macro conditions in flux, those with a long-term perspective may see this as a moment to reposition strategically.

Nexo

Game, set, match

We’ve stepped into the spotlight by partnering with the prestigious Acapulco Tennis Open, an ATP 500 event scheduled from February 24 to March 1, 2025. Featuring top-ranked players like Alexander Zverev, Casper Ruud, and Tommy Paul, the tournament underscores our focus on Latin America – a region witnessing record crypto adoption. This collaboration is a cornerstone of Nexo’s 2025 Growth Plan, aimed at expanding innovative digital asset solutions while reinforcing a commitment to long-term wealth. By aligning with a sport defined by precision, endurance, and strategy, we are helping to drive the integration of digital assets into everyday life.

XRP

XRP’s ETF countdown

The SEC has officially begun reviewing Grayscale’s XRP ETF proposal – a key milestone for the crypto industry. With the proposal published in the Federal Register on Feb. 20, the countdown is now underway — a decision must come by Oct. 18, 2025. Ripple’s XRP was not immune to the broader crypto market slump, adjusting 11% downward as of Tuesday afternoon.

All eyes are now set on the SEC process, which follows a structured timeline, with the regulator able to extend its review in stages. Optimism is high amid a seemingly shifting regulatory climate in the U.S., especially following the success of Bitcoin and Ethereum ETFs, which have demonstrated strong investor interest and institutional adoption. Will XRP (be allowed to) follow?

Ethereum

ETH: A tech glitch amid accumulation

Ethereum’s much-anticipated Pectra upgrade went live on the Holesky testnet on Monday. The upgrade was activated but developers hit a snag when transactions failed to finalize. While the episode raised concerns about potential roadmap delays, it was not the first time an upgrade has not finalized on a test network. Last year, when developers were testing Dencun, the hard fork did not initially finalize on the Goerli testnet.

Meanwhile, amid a crypto market correction that saw Ether drop 10% in 24 hours, Glassnode data shows steady accumulation at key support levels – 786,000 ETH near $2,632 and 1.22 million ETH around $3,150 – hinting that investors remain bullish on its long-term prospects despite the short-term setback.

Hot in crypto

Stablecoins: The next evolution of payments

Fed payments guru Chris Colson is spotlighting a massive trend poised to transform the payments landscape. According to his research at the Federal Reserve Bank of Atlanta, USD-pegged stablecoins are evolving beyond a simple hedge against volatility. “It’s going to be a new payment method,” Colson asserts, noting that the stablecoin market has surged past $230 billion.

Having tracked the rapid shift to contactless payments during the COVID-19 pandemic, Colson now sees retailers embracing stablecoin transactions. “It took ten years for Apple Pay to catch on,” he adds, emphasizing that change is already underway. His deep-dive research hints at a future where stablecoins redefine everyday transactions.

Macroeconomic round up

The numbers to heat up the week

That low Bitcoin volatility we highlighted earlier may see fresh dynamics this week, driven by a series of key events:

Nvidia Earnings (Wednesday): AI leader’s results could sway tech sentiment. A strong report may fuel a broader rally.
U.S. GDP Data (Wednesday): Economic growth signals for the Fed. Weak numbers might boost rate-cut bets, lifting digital assets.
Amazon Event (Wednesday): With a potential launch of a revamped, AI-powered Alexa, this event might boost tech sector sentiment.
Core PCE Price Index (Thursday): The Fed’s go-to inflation metric. A hotter reading could dampen rate-cut hopes, pressuring Bitcoin.
Fed’s Michael Barr Speech (Thursday): Remarks on novel activity supervision, including crypto-assets, could help clarify regulatory perspectives.

The week’s most interesting data story

Will Bitcoin sharks bite?

After cashing in on over $3 billion in realized profits earlier in the year, large Bitcoin holders have slowed their profit-taking, suggesting a strategic pause. This measured approach hints at anticipation for Bitcoin’s recovery move, as the market watches for its next catalyst.

The numbers

Top 5 stats of the week

$1 million – Digital Gold Theory will get the price of Bitcoin to $1 million per coin by 2030.
$2,962.69 – The gold ounce keeps hitting fresh all-time highs these days.
95% – This is how many Latin Americans plan to buy more crypto in 2025, a recent report says.
20,365 BTC – Strategy (ex-MicroStrategy) snapped up nearly $2 billion worth of BTC on Monday.
200% – Ethereum's potential upside eclipses its risk, capped at a 20% drawdown, according to media.

Hot topics

What the community is discussing

There’s more coming, isn’t there, Saylor?

One for the altcoin aficionados.

Are we seeing a star in the making?

Dispatch is a weekly publication by Nexo, designed to help you navigate and take action in the evolving world of digital assets. To share your Dispatch suggestions and comments, email us at [email protected]