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Bitcoin Plummets Amid Fed Uncertainty and Forced Liquidations, Key Levels Now in Focus
The recent Bitcoin selloff has accelerated, driven by mounting uncertainty surrounding the Federal Reserve’s monetary policy and a wave of forced liquidations in leveraged futures positions. The break below the $85,150 level has significantly shifted market psychology, transforming former support into near-term resistance.
In the latter half of the week, Bitcoin experienced a sharp decline as market sentiment turned increasingly cautious. According to sources, the selloff was primarily fueled by concerns that the Federal Reserve may tighten financial conditions again. This uncertainty prompted a rapid and deeper correction, especially as leveraged traders were compelled to close out their positions in the derivatives market.
“As prices fell, liquidations in futures trading triggered further selling, turning an initial reaction to the news into a rapid and deeper correction,” one analyst noted.
Over the past 24 hours, market attention has shifted away from specific news events and toward broader liquidity conditions. The uncertainty surrounding the Fed’s future policy path has led investors to reduce their exposure.
Currently, Bitcoin is struggling to regain ground above $85,150. As long as prices remain below this level, any rally is likely to be a corrective move rather than the start of a new uptrend.
Momentum indicators on the daily chart still indicate room for a short-term bounce. The Stochastic RSI, which had been capped near the $91,000 resistance area, has now entered oversold territory. However, a durable rebound will require two clear confirmation steps.
These steps include reclaiming and maintaining the $85,150 level in daily closes, followed by a break above the $87,000-$91,000 range, where short-term moving averages and intermediate resistance levels are located. If the market finds a catalyst to support a stronger rebound, Bitcoin reclaiming the $90,000 zone will shift attention to the $94,700 pivot level. A break above this area would signal an exit from the trading range established as November and favor buyers.
Long-Term Levels and Potential Support
Looking at the weekly chart, the broader uptrend in Bitcoin has not been fully broken. However, prices are currently near a significant long-term level, increasing the risk of a deeper correction. That key level is $82,000, aligning with the 0.382 Fibonacci level on the weekly chart.
In February and March of the previous year, prices briefly dipped below this area, but weekly closes remained above $82,000, acting as strong demand and ultimately leading to new highs. The market may attempt to establish a base around this level in the coming days. Though, if Bitcoin posts weekly closes below $82,000, the likelihood of a larger correction increases, potentially intensifying selling pressure. In that scenario, the $75,000 to $78,000 range could become the next area to watch, with the $69,300 level near the 0.5 Fibonacci mark potentially acting as a major support zone if the downtrend deepens further.
To summarize, in the base case, as long as prices stay below $85,150, any rebound is likely to face selling pressure, and the $82,000 level may be tested more frequently. Ongoing uncertainty in global markets could make it tough for Bitcoin to hold above $80,000. Continued pressure could drive prices toward the $70,000 area, with $78,000 and $75,000 acting as intermediate support levels.
In a more optimistic scenario, an improvement in global risk sentiment could help Bitcoin move back above $85,150 and then recover toward $91,000. If the rally extends toward $94,700, it could signal a broader trend reversal lasting into the middle of the month.
the recent decline began as investors reduced risk due to uncertainty surrounding the fed. Forced liquidations of leveraged long positions then accelerated and deepened the selloff. This manifested on the charts as a break below the $85,000 support level, with prices now searching for stability at lower levels.
Short-term rebounds are possible due to oversold conditions. Though, reclaiming the $90,000 zone is key for a stronger outlook. If that fails, attention will turn to whether the $82,000 level can hold on to weekly closes. A sustained move below that area
