BTCUSD Bitcoin

Bitcoin (BTC) price surged by 3% on March 24, distancing from its $76,900 low on March 11 despite failing to sustain the $88,000 level. Now, traders are wondering what factors could drive Bitcoin's daily close above $92,000, which last occurred on March 3. Adding to cryptocurrency investors’ frustration, gold is trading just 1% below its record high of $3,057, while Bitcoin price trades 19% away from its all-time high.

S&P 500 futures (left) vs. Bitcoin/USD (right). Source: TradingView / Cointelegraph

Some analysts attribute Bitcoin's recent price gains to the US-listed company Strategy increasing its BTC reserves, while others highlight macroeconomic factors, such as easing inflation expectations and a softer stance from US President Donald Trump on tariffs. Despite this constructive backdrop, traders question what is preventing Bitcoin from maintaining its bullish momentum.

Bitcoin’s upside is limited as investors fear an economic recession

Economists expect signs of a slowdown in the "core" Personal Consumption Expenditures (PCE) index, which is projected to rise by 2.7% in February, according to Yahoo News. This data, the US Federal Reserve's preferred inflation metric, is set to be released on March 26.

Implied expectations for the Sept. 17 FOMC. Source: CME FedWatch tool / Cointelegraph

If confirmed, the softer inflationary trend would support Federal Reserve Chair Powell's remarks on transitory inflation and increase the likelihood of two interest rate cuts in 2025, as reflected in the Treasury futures market.

As the US central bank shifts to a less restrictive monetary policy, risk markets typically benefit from increased liquidity and reduced fixed-income appeal. However, uncertainty remains regarding economic growth.

Investors are increasingly worried about recession risks due to excessive valuations in artificial intelligence stocks and concerns that US federal spending cuts could negatively impact consumers and the commercial real estate market. While these issues have little direct connection to Bitcoin, traders fear that all risk markets could suffer if the threat of stagflation emerges.

The Wall Street Journal reported that President Trump is considering scaling back some tariffs initially planned for April 2. Although unconfirmed, the news suggests Trump may exclude certain industry-specific duties and grant exemptions to some nations. On March 24, S&P 500 futures rose 1.5% as investors perceived lower economic contraction risks, potentially supporting Bitcoin’s price gains.

Strategy buys more Bitcoin, but is their tactic sustainable?

On March 24, Strategy announced the acquisition of an additional $584 million in Bitcoin, increasing its holdings to 506,137 BTC. The funds for this latest purchase came from the sale of 1.97 million common stock shares, along with the broader $21 billion STRK perpetual preferred stock issuance program. These expanded fundraising options have improved the company’s chances of reaching its ambitious $42 billion Bitcoin acquisition target.

While this news appears positive for Bitcoin’s price in the short term, if the US Federal Reserve implements expansionist measures, corporate earnings will likely accelerate, making stocks relatively cheaper. Likewise, a reduced risk of a full-scale global tariff war benefits the stock market and lowers risks in the artificial intelligence and commercial real estate sectors.

Related: Bitcoin ‘more likely’ to hit $110K before $76.5K — Arthur Hayes

Source: DexyyDx

Critics argue that Strategy has been the primary factor supporting Bitcoin’s $80,000 level, posing a risk of price corrections if the company fails to raise additional funds or pauses its stock issuance program for any reason. However, this view overlooks the fact that Bitcoin spot exchange-traded funds (ETFs) saw $786 million in net inflows between March 14 and March 21.

In essence, Bitcoin is well-positioned to recapture the $92,000 level, although it remains heavily dependent on overall macroeconomic conditions. Regardless of gold’s performance, investors view Bitcoin as a risk-on asset, favoring a higher correlation with the stock market, at least in the short term.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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