Bitcoin Breaks $68K Support as Dollar Sees Best Week in Year

What Happened

Bitcoin (BTC) fell sharply during Friday trading, dropping 4.46% to trade at $67,803 as of March 6, 2026. The decline coincided with a broader market retreat driven by a resurgent US Dollar. According to TradingView data, the US Dollar Index (DXY) rose approximately 1.5% for the week ending March 6, 2026, closing near 99.1—its steepest weekly gain in a year.

The sell-off was exacerbated by institutional cooling. KuCoin and Lookonchain reported that Spot Bitcoin ETFs recorded a net outflow of 1,697 BTC on March 6, 2026. In the derivatives market, the volatility triggered significant pain for bullish traders; total crypto market liquidations exceeded $254 million in the 24-hour period ending March 6, with long positions accounting for over 65% of the wipeout, according to FameEX.

:::chart BTC 7d

Background

The macroeconomic backdrop has shifted rapidly toward stagflation fears. While the US Non-Farm Payrolls (NFP) for February 2026 showed a surprise decline of 92,000 jobs—missing the consensus forecast of a 60,000 gain by a wide margin—the market did not react with the typical "bad news is good news" rally. Instead, investors fled to the safety of the dollar.

Geopolitical instability is playing a central role. With US-Israeli strikes on Iran entering their seventh day, Brent crude oil has pushed above $93/bbl. This rise in energy costs complicates the Federal Reserve's path; they face a contracting labor market (deflationary) alongside rising energy prices (inflationary). Consequently, Bitcoin's correlation with traditional tech stocks is weakening. Bitcoin's 30-day rolling correlation with the Nasdaq 100 dropped to 69% on March 6, 2026, down from a peak of 92% just one week prior.

The Bull Case

Despite the immediate price action, some analysts view the weak labor data as a catalyst for inevitable monetary easing. Owen Lau, an analyst at Clear Street, argues that the weak NFP data significantly increases the probability of Federal Reserve rate cuts later in 2026. Lau notes that historically, once the initial shock of a labor market contraction passes, liquidity injections drive retail and institutional interest back into risk assets like Bitcoin.

Furthermore, market structure suggests a potential rebound. Crypto analyst Sherlock notes that a massive "short liquidation wall" sits around $71,800. In a note to investors, Sherlock suggested that if Bitcoin can reclaim the $68,000 level, a move back toward this liquidity cluster could trigger a short squeeze, propelling BTC toward $75,000.

The Bear Case

Conversely, skepticism remains high regarding Bitcoin's role as a safe haven. Kevin Crowther of KC Private Wealth suggests that Bitcoin's failure to act as a hedge during the current geopolitical uncertainty points to continued weakness. Crowther highlights that Bitcoin is currently trading in lockstep with high-beta software stocks rather than gold.

Adding to the bearish outlook, a March 2026 analysis by JPMorgan confirms that Bitcoin's correlation with the US Dollar has flipped from negative to positive in recent days. The bank's analysts warn that this anomaly implies BTC is losing its status as a "dollar hedge" and is currently trading purely as a standard macro risk asset, leaving it vulnerable if the DXY continues its march toward 100.

What to Watch

Heading into the weekend and next week, traders should monitor three key metrics:

• The $65,000 Support: A breach of this psychological level could accelerate technical selling.
• Oil Prices: If Brent crude sustains levels above $95, stagflation narratives will likely suppress crypto appetite.
• ETF Flows: Continued outflows from the major Spot ETFs next week would confirm a shift in institutional sentiment.