Bitcoin may be defenseless against macroeconomic headwinds in the month ahead, despite the strong regulatory tailwinds. The flagship cryptocurrency is on pace to finish February down 19% – which would make it its worst month since June 2022 – after a broader risk-off move this week knocked it to a three-month low and put it more than 25% off its record. The outlook for its return to its uptrend in March isn't promising, investors say. Historically, March performance for bitcoin is uncertain, on average. It's finished March in the green in just six of the last 12 years, though it hasn't seen a March loss since 2020. However, its average return for the month in the same period is 13%, according to CoinGlass. "Macro factors will continue to be the biggest driver of digital asset price performance over the short-term," said H.C. Wainwright analyst Mike Colonnese told CNBC. "Austerity measures the government is taking through DOGE, tariffs on imports from Canada and Mexico expected to go into effect in March, and sticky inflation have worked together to create a risk-off environment." BTC.CM= 1M mountain Bitcoin is heading for its worst month since 2022 "We are neutral over the short-term and expect bitcoin to consolidate in this mid-$80,000 to low-$100,000 range until we get the next wave of crypto-specific catalysts," he added. "With all that said, we remain bullish over the medium term on regulatory tailwinds and growing institutional adoption." Headwinds vs. tailwinds Bitcoin kicked off the year in rally mode, fueled by optimism about the positive changes the new Trump administration would make for the crypto industry. However, since the president issued his widely anticipated executive order on crypto at the end of January, crypto investors have had little to look forward to. That's despite the Securities and Exchange Commission moving swiftly on several cases pending from the previous administration. In February alone, the agency ended its enforcement case against Coinbase ; closed its investigations into Robinhood's crypto unit , Uniswap, Gemini and Consensys with no enforcement action; scaled back its crypto enforcement unit; and on Thursday night, issued a statement clarifying that meme coins are not securities . Optimism about the long-term positive impact of Trump's crypto policies remains high, but absent a clear catalyst, bitcoin's movements may continue to be dictated by macroeconomic trends. Many have warned that bitcoin could return to pre-election levels around $70,000 before reversing higher. "Short term, [crypto] markets are in a pretty fragile state, and part of that has to do with the macro environment," said David Duong, head of institutional research at Coinbase. "There are a lot of concerns surrounding tariffs and for a while [they] weren't really being priced in by markets. Now it seems to be fully getting priced in because we're also seeing negative survey data – it's all contributing to concerns around the U.S. growth story more broadly." Investors will be closely watching the February consumer price report due March 12 and the two-day Federal Reserve policy meeting beginning March 18. Silver linings Joel Kruger, market strategist at LMAX, said there could be an opportunity in March to put bitcoin's attractiveness as a portfolio diversifier on display. "There will be an opportunity for bitcoin to shine if we see any intensified stress in global markets," he said. "There will be a place, if we do get down into the $70,000 to $75,000 area, where bitcoin starts to show it's not necessarily correlated with stocks and risk sentiment … [and] perhaps show itself more as the store of value asset." "Within the darkness of the pullbacks that will be a silver lining," he added. "It will allow bitcoin to show itself for its real properties, which will help to further its maturity as an asset."
