Bitcoin’s price has experienced a notable decline in recent days, dropping to $80,186 before stabilizing at approximately $82,250, marking a decrease of over 5% from previous levels. This downturn follows President Trump’s announcement on March 7 regarding the creation of a Bitcoin reserve, which will use forfeited cryptocurrencies from criminal cases. Contrary to expectations that the government would purchase Bitcoin directly from the market, the new policy of utilizing seized assets has left many investors disappointed. They had hoped that government acquisition could signal institutional backing and potentially drive up the price.
The impact of this shift in expectations was immediately felt in the market, with over $562.33 million worth of liquidations occurring within just 24 hours. Long positions were particularly affected. This sell-off has sparked concern, further exacerbated by Bitcoin’s current Relative Strength Index (RSI), which stands at a significantly oversold level of 28. Historically, when the RSI has reached such lows, Bitcoin has either reached its price bottom or was within a few percentage points of it. While some analysts view this as an indication that Bitcoin may be approaching a bottom, others caution that further price correction is still possible.
In addition to Bitcoin-specific factors, broader macroeconomic developments are contributing to the cryptocurrency’s volatility. Key upcoming U.S. economic reports, including data on the Consumer Price Index (CPI) and job openings, are expected to heavily influence Bitcoin’s price in the near term. Analysts, including Iliya Kalchev from Nexo, suggest that Bitcoin’s short-term trajectory will be closely linked to these reports, as they will likely impact inflation expectations and the Federal Reserve’s interest rate decisions.
Despite the recent price drop, there remains cautious optimism about Bitcoin’s long-term future. Analysts such as Alex Thorn from Galaxy Digital predict that Bitcoin could potentially reach $150,000 by mid-2025. This forecast is driven by growing institutional adoption and government policies that support cryptocurrency growth. The continued development of Bitcoin exchange-traded funds (ETFs) further strengthens the case for long-term bullish sentiment in the digital asset space.
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