Bitcoin could face increased volatility at Mowerside if it closes a week below its major $82,000 support level as investors' sentiment remains curtailed after a short-term disappointment in the US strategic Bitcoin reserve.
President Donald Trump's executive order, signed on March 7, outlined plans to create a Bitcoin reserve using cryptocurrency confiscated in government criminal cases, rather than actively obtaining Bitcoin (BTC) through purchases in the market.
According to analysts at Bitfinex, the shortage of direct federal Bitcoin investments has resulted in “negative short-term market responses and lower Bitcoin prices.”
Bitcoin needs to close a week beyond key $82,000 support to avoid further declines due to this short-term investor disappointment, analysts told Cointelegraph, adding:
“Investors could raise prices as they expected the federal accumulation of Bitcoin to show strong institutional support. However, relying on existing holdings without additional investments eased these expectations.”
“It shows the sensitivity of the cryptocurrency market to government actions and policies,” the analyst added.
BTC/USD, 1 month chart. Source: Cointelegraph
Bitcoin, meanwhile, lacks a large price momentum, trading under the psychological mark of $90,000 since March 7, when Trump held its first White House Script Summit.
Close the week beyond the $82,000 major support could indicate a shift in Bitcoin sentiment as investors digest the nuances of Trump's Bitcoin reserve proposal.
Related: Trump has changed crypto from “oppressed industry” to “focus” of our strategy
Macroeconomic factors focus on Bitcoin prices
Bitcoin Price continues to pressure macroeconomic development and global trade concerns beyond crypto-related legislation announcements, according to Iliya Kalchev, dispatch analyst at Digital Asset Investment Platform Nexo.
“Short-term movements are heavily influenced by macroeconomic factors,” an analyst told Cointelegraph.
“Next week, all eyes will turn to a US economic event that is expected to show consumer price indexes that show slowing inflation and job posting reports that will serve as key indicators of labor market strength and potential for interest rate reductions.”
Related: Bitcoin activity rises, potential reversals, hints at the bottom of the market
Still, weekly deadlines below $82,000 could introduce significant volatility into the crypto market.
Bitcoin exchange liquidation map. Source: Coinglass
Potential Bitcoin correction below this level triggers a long liquidation of cumulative leverage worth $1.13 billion across all exchanges, Coinglas data shows.
On the bright side, Bitcoin may be approaching its local bottom based on the Relative Strength Index (RSI), a key technical indicator that measures whether assets are being oversold or oversold.
BTC/USD, one-day chart, RSI. Source: Rekt Capital
Bitcoin's RSI is number 28 on the daily chart, indicating that its assets are on sale. Every time Bitcoin's RSI reaches 28 during this current cycle, Bitcoin's price is “away from the bottom or -2% to -8% bottom,” popular Crypto analyst Rekt Capital wrote in the X-Post on March 8th.
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