- Bitcoin must stay above $82K to avoid $1.13 billion in liquidations and increased volatility following Bitcoin reserve
- Investor sentiment weakened after Trump’s Bitcoin reserve plan excluded new BTC purchases.
- Upcoming U.S. economic data, including CPI and job reports, could impact Bitcoin’s price.
The price trajectory of Bitcoin is in danger as it hovers around the critical $82,000 support level. Analysts warn that a weekly close below this level can trigger over $1.13 billion worth of leveraged long liquidations on exchanges. Which is leading to heightened volatility for the crypto market.
Trump’s Bitcoin Reserve and Market Reaction
The recent price weakness follows an executive order signed by then U.S. President Donald Trump on March 7. The order outlined proposals to establish a U.S. Strategic Bitcoin Reserve using seized Bitcoin from criminal cases.
This move disappointed investors who were eagerly awaiting outright federal Bitcoin purchases as a demonstration of institutional endorsement. Bitfinex analysts stated that the lack of active government investment led to short-term bearish sentiment, contributing to the decline in Bitcoin’s price.
“Investors wanted federal accumulation to be a sign of robust institutional support, maybe to push prices higher. But using holdings that are based on today allowed expectations to remain in check,” Bitfinex analysts explained.
Macroeconomic Developments
Other than the regulation decisions, Bitcoin’s price is still influenced by macroeconomic developments. Nexo analyst Iliya Kalchev mentioned that Bitcoin’s short-term prices will be influenced by future U.S. releases.
Everyone will be holding their breath next week for the Consumer Price Index (CPI) and job openings report. Those numbers will inform us of inflation trends and labor market health, and that will be something that will influence investor sentiment,” Kalchev said.
If inflation slows down and labor market conditions worsen, expectations for interest rate cuts could increase, which would be beneficial for Bitcoin as a diversification vehicle. Alternatively, stronger-than-anticipated economic news may continue to place downward pressure on the price of Bitcoin.
Technical Indicators
Despite the bearishness, some technical indicators say that Bitcoin is near a local bottom. Relative Strength Index (RSI), or a measurement of whether or not an asset is overbought or oversold, reads 28 on the daily chart. Historically, whenever the RSI for Bitcoin is around this number, the price bottomed or came within 2%–8% of doing so.
If Bitcoin ends the week higher at above $82,000, it can send a message to change sentiment and help mend investor confidence. But a break below will bring more volatility to the lower side, and so traders and investors hold their breath for that to happen.
As the market is processing Trump’s reserve approach to Bitcoin and macroeconomic developments. Thus, everyone sits and waits and observes if Bitcoin maintains its critical support level for the next several days.
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Source: https://thenewscrypto.com/bitcoin-risks-weekly-close-below-82k-following-us-bitcoin-reserve-news/