After reaching a peak of nearly 74,000 on March 14th, bitcoin experienced a rapid 15% decline, dropping to a low near 63,000 on March 19th. This downward movement caught many off guard, especially with the impending "halving," which will halve the monetary reward for mining bitcoin and, theoretically, reduce supply while potentially boosting prices. Long-term bitcoin traders note that profit-taking pullbacks in the weeks leading up to a halving are not uncommon. While the previous three halvings generally acted as a tailwind for bitcoin, there has historically been bidirectional volatility before such events, possibly due to overbought conditions and position squaring.  

Interestingly, bitcoin appears to be unaffected by fluctuations in interest rates, largely ignoring the 60-basis point increase in two-year yields that began in mid-January. Some evidence suggests that bitcoin's overall resilience may be linked to concerns about rising inflation associated with government spending. The national debt is projected to increase by one trillion dollars every four months from an already staggering 34.5 trillion. Similarly, there have been upward movements in traditional dollar hedges like gold and silver, as well as in related commodities such as copper and crude oil. Economic data for March has been mixed, with indicators like ISM, retail sales, factory orders, and Empire manufacturing falling below expectations, while inflation figures like CPI and PPI surpass expectations. It's theorized that economic uncertainty could act as a tailwind for dollar hedges like bitcoin and gold. In the first half of April, we will see the next round of pertinent economic data which has the potential to greatly affect the prevailing narrative.