19h05 ▪
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min read ▪ by
Bitcoin (BTC) could be on the brink of notable volatility, potentially leading to over $1.13 billion in liquidations for long positions if it dips below the key level of $82,000. As it currently trades at $83,000, bearish sentiments are growing as investors respond unfavorably to recent updates regarding the U.S. strategic bitcoin reserves.
The Bitcoin Reserve Disappoints and Exacerbates the Drop in BTC!
On March 7, 2025, President Donald Trump issued a decree to establish a bitcoin reserve utilizing cryptocurrencies confiscated from criminal activities, rather than purchasing them actively on the market. This news has left investors feeling disheartened, as they hoped the U.S. government would take a more assertive approach to BTC accumulation.
Analysts suggest that this absence of direct investment has sparked a negative short-term response and contributed to a decline in BTC prices. Investors had anticipated a federal buy-up of bitcoin, which might have indicated robust institutional support and driven prices higher. However, this reliance on existing stocks has deflated those expectations, resulting in the current downturn of bitcoin.
As a result, bitcoin needs to finish the week above $82,000 to prevent a more serious retracement. A drop below this benchmark could lead to heightened selling pressure and a rush of liquidations in the market.
The Consequences on the BTC Market
Currently, BTC is trading at $83,335; should it fall under the crucial mark of $82,000, it could result in the liquidation of $1.13 billion in long leveraged positions. Such a decline would instigate a chain reaction of forced selling, exacerbating market volatility and a situation dreaded by traders and investors alike.
Despite the bearish environment, some technical indicators suggest that bitcoin might be nearing a local bottom. The Relative Strength Index (RSI) has dipped to 28, indicating an oversold condition. Analyst Rekt Capital highlighted on X that whenever the RSI reached this point in the current cycle, BTC was typically on the verge of a rebound or a local bottom, ranging from -2% to -8%.
The following days are critical for bitcoin. A weekly close below $82,000 could intensify the correction and trigger large-scale liquidations. However, a technical rebound remains a possibility if investors regain confidence to start buying. The market is under considerable tension, much like XRP, which faces a potential 20% drop in the upcoming days.
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The world is changing, and adaptation is the best strategy for survival in this fluctuating environment. As a former crypto community manager, I have an interest in anything related to blockchain and its applications. To share my insights and promote a field I am passionate about, writing informative and engaging articles is my forte.
DISCLAIMER
The opinions, thoughts, and perspectives in this article are exclusively those of the author and should not be construed as investment advice. Conduct thorough research before making any investment choices.
