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Bitcoin Demand Falls 22% Amid Geopolitical Tensions, Inflation Fears

Coin WorldFriday, Mar 14, 2025 5:08 pm ET
2min read

Bitcoin's apparent demand has significantly decreased as the market grapples with geopolitical tensions and macroeconomic challenges. Recent data indicates that Bitcoin's demand has fallen into negative territory, reflecting investor caution in the current economic climate. A CryptoQuant analyst noted that the lowest apparent demand levels in 2025 are a result of traders' reluctance to engage with risk-on assets due to persistent inflationary concerns.

Bitcoin's price struggles have been exacerbated by macroeconomic challenges, leading to a cautious trading environment. The post-election optimism has waned, particularly after the mixed reactions from the White House Crypto Summit held on March 7. The uncertainty in macroeconomic conditions has become more pronounced as political processes unfold.

In a surprising turn, despite lower-than-expected Consumer Price Index (CPI) inflation figures reported on March 12, Bitcoin's price saw an immediate downturn. This unexpected market response highlights the fragile confidence among investors. Traditional financial investors are turning away from cryptocurrencies, with crypto exchange-traded funds (ETFs) experiencing significant outflows over the past month. This trend underscores a growing aversion to risk across the financial landscape.

Poor market sentiment, coupled with recession fears, has created a panic-selling environment that has adversely affected crypto prices. Since the inauguration of President Trump on January 20, the Total3 Market Cap, representing the broader crypto market excluding Bitcoin (BTC) and Ether (ETH), has plummeted over 27%, falling from more than $1.1 trillion to approximately $795 billion. Bitcoin has not escaped this downward trend, with its price decreasing more than 22% from a peak above $109,000 to current levels. Currently, Bitcoin trades below its 200-day exponential moving average (EMA), a critical indicator of long-term price trends, showing weakness since March 9.

Furthermore, Bitcoin’s volatility, indicated by its Average True Range (ATR) of over 5,035, suggests that price fluctuations are likely as the market continues to grapple with macroeconomic factors. Analyst Matthew Hyland posits that securing a close above $89,000 on a weekly basis is crucial for Bitcoin to avoid a potential correction down to $69,000, adding to the urgency for traders.

The increasing preference for safer assets among investors is discernible through the recent trends in market behavior. Heightened economic anxiety surrounding potential trade wars and ongoing geopolitical tensions is making traditional assets like cash and government securities more attractive than cryptocurrencies. Despite past bullish movements, the current landscape indicates that many investors are adopting a risk-off approach. Analysts suggest that the combination of sustained inflation rates—hovering above the Federal Reserve’s targeted 2%—and uncertainties surrounding economic conditions are forcing traders to reconsider their positions in crypto assets.

This shift reflects a decisive moment in the market, with many crypto participants now weighing their options carefully before committing additional capital. While the potential for recovery remains, immediate sentiment points to a prolonged period of volatility and corrective trends. In summary, the current environment surrounding Bitcoin and the broader cryptocurrency market is characterized by heightened caution and significant demand challenges. As geopolitical tensions and economic instability continue to exert pressure on prices, investors are increasingly seeking shelter in safer assets. The overall outlook hinges on Bitcoin’s ability to reclaim psychological price levels and regain investor confidence in the coming months, but a return to stability appears contingent upon broader economic recovery.

Comments

Post
Anthony
9 hour ago

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0
ConstructionOk6948
6 hour ago
@Anthony Sure
0
Debbie
10 hour ago

𝗧𝗿𝘂𝘀𝘁 𝗺𝗲 𝗶𝘁𝘀 𝗮𝘄𝗲𝘀𝗼𝗺𝗲! 𝗜𝘁'𝘀 𝗻𝗼𝘁 𝗮𝗯𝗼𝘂𝘁 watching 𝘁𝗵𝗲 𝘃𝗶𝗱𝗲𝗼𝘀 𝗮𝗻𝗱 wasting 𝘆𝗼𝘂𝗿 𝘁𝗶𝗺𝗲 𝗼𝗻 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗲𝘀, 𝗜 𝘄𝗮𝘀 ignorant 𝗱𝗼𝗶𝗻𝗴 𝘀𝗼 𝘁𝗵𝗲𝗻 𝗜 decided 𝘁𝗼 𝘁𝗿𝘆  @ 𝗗iana Goulding she 𝗵𝗮𝘀 𝗺𝗮𝗱𝗲 𝗺𝗲 𝗮𝗯𝗼𝘂𝘁 $𝟭𝟲𝗸 𝗳𝗼𝗿 𝗲𝘃𝗲𝗿𝘆 $𝟰𝗸 𝗜 𝗶𝗻𝘃𝗲𝘀𝘁𝗲𝗱. 𝗗𝗺 𝘃𝗶𝗮 𝐖𝐭𝐬𝐩✙ 𝟏𝟐𝟐𝟑𝟐𝟖𝟑𝟕 𝟑𝟔𝟖..

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SHIT_ON_MY_BALLS
9 hour ago
@Debbie Fair enough
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BranchDiligent8874
14 hour ago
Geopolitical tensions are the crypto-kryptonite. 🤔
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Agreeable_Zebra_4080
14 hour ago
Investors are fleeing crypto for safety nets. Geopolitical tensions and inflation are the villains. Who's holding through this rollercoaster?
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dantheman2108
14 hour ago
Inflation fears making me HODL cash instead.
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MonstarGaming
14 hour ago
Investors are fleeing crypto for safety nets. Not surprising with inflation fears and geo-tensions. Traditional assets seem more appealing right now.
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PlentyBet1369
10 hour ago
@MonstarGaming What do you think about ETF outflows?
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enosia1
14 hour ago
CryptoQuant analyst knows his stuff, worth a read.
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Far_Sentence_5036
14 hour ago
$AAPL safer than BTC right now, weird times.
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Working_Initiative_7
14 hour ago
Risk-off approach is the new norm, sad!
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liano
14 hour ago
Bitcoin's volatility is wild, ATR is nuts
0
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
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