Important Day in Financial Markets: March 5, 2025

Today, Wednesday, March 5, 2025, could prove to be an important day in the financial markets: a timid optimism is starting to circulate, thanks to which the price of Bitcoin has returned close to $90,000.

Although there is still a lot of uncertainty, it seems to be decreasing.

Summary

• Analysis of the daily performance of Bitcoin price
• The role of the dollar
• The issue of tariffs
• The forecasts on the price of Bitcoin (BTC)

Analysis of the Daily Performance of Bitcoin Price

Yesterday, Bitcoin (BTC) was still around $87,000. Today, however, it has returned close to $90,000.

The current value is still significantly lower than both the $95,000 reached on Sunday and the $91,000 on Monday, but it seems that, little by little, it is at least recovering what it lost yesterday.

It must be said that on Saturday, before Trump’s announcement on the strategic crypto reserve of the USA, it was at $85,000, so today’s levels are still to be considered very positive.

In fact, when significant and sudden rises occur like the one on Sunday, a significant role is played by the forced liquidations of leveraged positions, resulting in inefficiencies. Such inefficiencies tend to be closed later at a subsequent time, which is exactly what happened between Monday and yesterday.

So, net of these technical ups and downs, the price of BTC has gone from $85,000 on Saturday to about $90,000 today.

Note that the current level is perfectly in line with the minimum levels of the long lateralization phase that lasted from November 12 to February 24.

The Role of the Dollar

But Wednesday, March 5, 2025, could prove to be an important day in the financial markets for another reason: the weakening of the dollar.

The Dollar Index, after Trump’s electoral victory, had risen significantly, reaching up to 110 points a few days before his inauguration in the White House.

Since then, it remained high until early February, and then it started to decline around the middle of the month.

In reality, with hindsight, we can say that after reaching 110 points as early as January 11, it started to decline, but until February 10, it was difficult to notice.

Today, however, there is one more element. The decline that began after January 11 had brought the Dollar Index to about 106 points at the end of February, but the month had closed again at almost 108 points. However, despite this, on Monday it fell to 106 points and yesterday to 105.5.

Today it even fell below 105 points. This drop constitutes an acceleration in the pace of decline, given that it had been mild until February 26, but is now becoming significant.

The Issue of Tariffs

The financial markets have recently been heavily influenced to the downside by the possible negative consequences of Trump’s trade war with tariffs.

These difficulties have also impacted the trend of Bitcoin price, which fell below $80,000 at the end of February.

Now, however, things seem to be starting to change. Trump’s goal is to rebalance the USA’s trade balance with foreign countries, which is heavily skewed towards imports. For now, he has tried to accomplish this by reducing imports with tariffs; however, this measure will harm everyone, including Americans themselves.

An alternative, which is a better strategy, is to increase exports, but to achieve this, the dollar needs to weaken. The problem is that simply trying to devalue the dollar won’t work; the EU and China would likely respond by devaluing their respective currencies as well.

For such a strategy to succeed, it is necessary for the EU and China not to respond by devaluing their currencies. It should be remembered that for over two years, China has kept the yuan artificially low, and the USA is attempting to force China to change this.

If today a sustained decline period of the Dollar Index has indeed begun, it could mean that Trump has managed to convince China to accept a devaluation of the dollar without devaluing the yuan in response, possibly prompting Trump to reduce or remove the tariffs.

Forecasts on the Price of Bitcoin (BTC)

Note that since February 25, the rally in gold prices has ended due to an increase in fears about the future.

In fact, starting from February 25, a phase of decline in the gold price might have begun, which, if confirmed, could indicate that fear in the markets is beginning to fade.

In such a scenario, it is reasonable to expect that sooner or later the price of Bitcoin may benefit from improvements in the geopolitical and economic-financial climate, although it will likely require a period of adjustment before seeing it return above $100,000.

The important thing is that in the last few weeks of difficulty, it has never fallen below $75,000, and the evolution of the geopolitical situation seems to be progressing positively.

Reports indicate that Trump might be inclined to reduce tariffs soon, especially with a rapidly declining Dollar Index, which could make them unnecessary and counterproductive.

In the medium term, the price of Bitcoin could not only return above $100,000 but possibly attempt new attacks on the elusive threshold of $110,000, which has yet to be surpassed.