Bitcoin may be heading towards a turbulent end to the week, potentially dipping below the significant $82,000 support level. This comes amidst investor dissatisfaction stemming from the recent letdown in the US Strategic Bitcoin Reserve.
On March 7, an executive order signed by President Donald Trump laid out a plan for building a Bitcoin reserve. Rather than actively buying Bitcoin (BTC) on the market, the plan involves using cryptocurrency confiscated in government criminal cases.
Bitfinex analysts suggest that the absence of direct federal Bitcoin investment has triggered a temporary negative market reaction, causing a dip in Bitcoin’s price. They stressed to Cointelegraph that Bitcoin needs to finish the week above the crucial $82,000 support level to avoid further decline due to investor disappointment.
They added: “Investors were hopeful that federal accumulation of Bitcoin would signal robust institutional support, potentially driving prices up. However, the reliance on existing holdings without additional investments has dampened these expectations.”
Since Trump’s first White House Crypto Summit on March 7, Bitcoin has struggled to maintain momentum, trading below the psychological $90,000 mark. However, an end-of-week close above $82,000 could indicate a shift in investor sentiment towards Trump’s Bitcoin reserve plan.
Bitcoin’s price also continues to be influenced by macroeconomic factors and global trade issues, as noted by Iliya Kalchev, a dispatch analyst at digital asset investment platform Nexo. A weekly close below $82,000 might incite significant volatility in crypto markets, potentially triggering over $1.13 billion worth of cumulative leveraged long liquidations across all exchanges, according to CoinGlass data.
On a positive note, Bitcoin might be approaching its local bottom according to the relative strength index (RSI), a key technical indicator. Bitcoin’s current RSI stands at 28 on the daily chart, indicating that the asset is oversold. Historically, when Bitcoin’s RSI reaches 28, the price tends to bottom out or be within -2% to -8% of a bottom.
