- Bitcoin selloff accelerated by Fed uncertainty and forced liquidations in leveraged futures positions.
- Break below 85,150 shifted market psychology, turning former support into near term resistance.
- Oversold conditions allow rebounds, but reclaiming 90,000 remains key for confidence recovery.
In the latter half of the week, saw a sharp drop as market sentiment turned more cautious. The selloff was driven mainly by uncertainty around the Federal Reserve and concerns that financial conditions could tighten again.
The decline accelerated because many leveraged traders were forced to close 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.
Over the past 24 hours, market attention has shifted away from individual news events and toward overall liquidity conditions. Uncertainty around the Fed’s policy path has led investors to cut exposure to riskier assets.
In such phases, Bitcoin continues to behave more like a high-risk global asset than a safe store of value in the short term. When risk sentiment weakens, volatile assets like Bitcoin tend to be sold first as the market looks for a new balance.
As a result, conditions now appear oversold, which could allow for short-term rebounds. However, a lasting recovery will likely need a fresh trigger to rebuild investor confidence.
Bitcoin Technical Outlook
From a technical perspective, the key break came when prices fell below the 85,150 level, which had held twice earlier and was closely watched. When an important support level breaks on the third test, market psychology usually shifts. That level often stops acting as support and starts acting as resistance.
Because of this, any short-term rebound will first be judged by whether the market can move back above 85,150. As long as prices stay below this level, any rally is likely to be corrective rather than the start of a fresh uptrend.
On the daily chart, momentum indicators still leave room for a short-term bounce. The Stochastic RSI, which had been capped near the 91,000 resistance area, has now moved into oversold territory. That said, a recovery would still need two clear confirmation steps before a more durable rebound can be considered.
-
Reclaiming and maintaining the $85,150 level in daily closes,
- Followed by a break above the $87,000-$91,000 range, which is where the short-term moving averages and intermediate resistance levels are located on the daily chart.
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 in place since November and would tilt the balance more clearly in favor of buyers.
Looking at the weekly chart, the broader uptrend in Bitcoin has not fully broken. However, prices are sitting close to an important long term level, which keeps the risk of a deeper correction elevated.
That key level is 82,000, which aligns with the 0.382 Fibonacci level on the weekly chart. In February and March last year, prices briefly dipped below this area, but weekly closes stayed above 82,000. That zone acted as strong demand and was followed by a move to new highs in the months ahead.
The market may again try to form a base around this level in the coming days. If Bitcoin begins to post weekly closes below 82,000 this time, the chances of a larger correction increase and selling pressure could intensify. In that case, the 75,000 to 78,000 range may become the next area to watch. If the downtrend deepens further, the 69,300 level near the 0.5 Fibonacci mark could come into focus as a major support zone.
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 often. Ongoing uncertainty in global markets could make it hard for Bitcoin to hold above 80,000. If pressure continues, prices could drift toward the 70,000 area, with 78,000 and 75,000 acting as intermediate support levels.
In a more positive 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 that lasts into the middle of the month.
Overall, the recent decline started as investors reduced risk due to uncertainty around the Fed. Forced liquidations of leveraged long positions then made the selloff faster and deeper. On the charts, this showed up as a break below the 85,000 support level, with prices searching for stability at lower levels.
Short-term rebounds are possible because the market looks oversold. However, 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 would open the door to further downside.
****
Below are the key ways an InvestingPro subscription can enhance your stock market investing performance:
- ProPicks AI: AI-managed stock picks every month, with several picks that have already taken off this month and in the long term.
- Warren AI: Investing.com’s AI tool provides real-time market insights, advanced chart analysis, and personalized trading data to help traders make quick, data-driven decisions.
- Fair Value: This feature aggregates 17 institutional-grade valuation models to cut through the noise and show you which stocks are overhyped, undervalued, or fairly priced.
-
1,200+ Financial Metrics at Your Fingertips: From debt ratios and profitability to analyst earnings revisions, you’ll have everything professional investors use to analyze stocks in one clean dashboard.
-
Institutional-Grade News & Market Insights: Stay ahead of market moves with exclusive headlines and data-driven analysis.
-
A Distraction-Free Research Experience: No pop-ups. No clutter. No ads. Just streamlined tools built for smart decision-making.
Not a Pro member yet?
Already an InvestingPro user? Then jump straight to the list of picks here.
Disclaimer: This article is for informational purposes only. It is not intended to encourage the purchase of any asset and does not constitute a solicitation, offer, recommendation, or advice to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, and therefore any investment decision and the associated risk belong to the investor. Additionally, we do not offer any investment advisory services.