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Bitcoin pioneer cryptocurrency has been facing intense selling pressure, pushing its price to a multi-month low of $80k. This sharp decline triggered massive market liquidations, wiping out nearly $650 million in the past 24 hours. With the crypto fear and greed index dropping to 17 (Fear), investors are now questioning whether Bitcoin can recovery or see more drop ahead.
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 massive price drop was triggered mainly due to the plan that does not involve new Bitcoin purchases.
Trump has instructed trade and commerce officials to find “budget-neutral” ways to acquire Bitcoin, but the details of how this would work remain unclear.
The reserve will consist of Bitcoin seized by the government, mainly held by the Department of Justice. While this move suggests that the government won’t sell these assets, the lack of a clear buying strategy means it may not have a strong impact on the market.
Liquidation Adding more Pressure
According to data from CoinGlass, the crypto market saw liquidations worth approximately $650 million in the past day. Long traders took the biggest hit, suffering losses of nearly $500 million, while short traders faced around $147 million in liquidations.
The largest single liquidation order happened 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 the crypto analyst Michaël van de Poppe, bitcoin’s 12-hour price chart is hovering near critical levels.
The first scenario suggests BTC could bounce from its current range and establish a new higher low, paving the way for a potential breakout. However, if it continues to struggle below $86K, a deeper correction could follow, possibly testing support near $78,000.
Bitcoin’s price bounce has moved the Relative Strength Index (RSI) from oversold levels back into a weak zone, suggesting that sellers may still be in control.