Bitcoin faced intense selling pressure, pushing its price to a multi-month low of $80k, triggering massive market liquidations.
US Bitcoin Reserve Triggered a Drop
The U.S. government’s plan to create a Strategic Bitcoin Reserve led to a sharp 7% drop in Bitcoin’s price. The drop resulted from the plan not involving new Bitcoin purchases. Trump's administration is seeking 'budget-neutral' ways to acquire Bitcoin, though details remain unclear. The reserve will consist of Bitcoin seized by the government, mainly held by the Department of Justice.
Liquidation Adding More Pressure
Data from CoinGlass shows the crypto market saw liquidations worth $650 million in the past day. Long traders suffered the most, with losses of $500 million, while short traders lost around $147 million. The largest single liquidation was on Binance's BTCUSDT pair, worth $32.09 million.
Bitcoin Struggles at Key Resistance
Despite the sharp drop, Bitcoin managed to bounce back by 2%, reaching around $83,400. According to crypto analyst Michaël van de Poppe, bitcoin's 12-hour price chart is hovering near critical levels. The first scenario suggests BTC could bounce and establish a higher low, paving the way for a breakout. However, if it struggles below $86K, further decline to $78,000 support is possible.
The current market situation with bitcoin raises serious concerns among investors and analysts. The future of the U.S. Bitcoin Reserve and its impact on the market remains an open question.
