Bitcoin (BTC-USD) Faces Critical Support as Volatility Surges
Bitcoin (BTC-USD) has experienced a turbulent start to the week, erasing its weekend gains and falling below key technical levels. Trading at $83,900, BTC has dropped 8% since Monday, continuing its decline from its weekend high of $95,000. The recent volatility follows US President Donald Trump’s announcement of a Crypto Strategic Reserve, which initially fueled a rally but quickly turned into a "buy the rumor, sell the news" event.
The liquidation wave has been severe, with 289,815 traders wiped out, leading to $978.62 million in liquidations in just 24 hours. The market is now questioning whether Bitcoin can hold its critical support levels, or if the ongoing risk-off sentiment will push BTC to new lows.
Technical Breakdown: Bitcoin’s Key Levels in Focus
Bitcoin is currently testing its 200-day EMA, a crucial indicator of long-term trend direction. A decisive breakdown below this level could accelerate selling pressure and push BTC toward the $75,000 support zone, which previously acted as a strong base during consolidation.
The RSI sits at 36, confirming strong bearish momentum after BTC failed to reclaim $90,000. A further drop could see Bitcoin approach the $73,000 level, which is emerging as the next significant support.
A death cross formation—where the 50-day MA crosses below the 100-day MA—is flashing a bearish warning, suggesting that Bitcoin may face further downside in the short term. If BTC fails to bounce from current levels, traders are eyeing $73,000 as the next key test, with a more severe correction potentially dragging prices to $60,000.
Bitcoin ETF Outflows and Institutional Weakness Weigh on BTC-USD
Bitcoin’s institutional demand has shown clear signs of weakness, adding to the bearish sentiment. Spot Bitcoin ETFs recorded a net outflow of $74.2 million on Monday, following $2.39 billion in withdrawals last week. Investors are growing cautious amid escalating geopolitical risks, inflation concerns, and uncertainty surrounding Trump’s tariff policies on Canada, Mexico, and China.
This marks a significant reversal from the bullish flows seen in February, when Bitcoin ETFs saw fresh inflows, helping BTC climb to $95,000. If this trend of institutional outflows continues, Bitcoin may struggle to reclaim its previous highs.
Bitcoin’s Open Interest Falls to Six-Month Low—A Bullish or Bearish Signal?
Bitcoin’s open interest (OI) has dropped to a six-month low, a key indicator that often precedes major price movements. Historically, when OI reaches such low levels, Bitcoin has followed with significant price jumps. Last time OI was this low, BTC was trading between $50,000 and $60,000 before rallying toward $100,000.
However, the broader sentiment remains cautious. Funding rates have turned negative, which suggests that the market is leaning bearish, with traders hesitant to take long positions at current levels. If open interest continues to drop alongside prices, Bitcoin could face a prolonged correction before the next bullish breakout.
Liquidation Wipeout: Nearly $1 Billion Lost in 24 Hours
Bitcoin’s sharp decline has led to an unprecedented $978.62 million in liquidations, with the largest single liquidation occurring on Bitfinex at $13.40 million. The forced unwinding of leveraged positions has fueled additional selling pressure, intensifying Bitcoin’s downward momentum.
The massive liquidation heatmap suggests that Bitcoin may continue to face strong resistance near $90,000, as traders who entered at higher levels have been forced to exit. Until leverage resets and new buyers step in, BTC could remain under pressure in the short term.
Trump’s Crypto Strategic Reserve—A Game-Changer or a Distraction?
Trump’s Crypto Strategic Reserve announcement initially sparked optimism, pushing Bitcoin’s price above $94,000. However, skepticism quickly took over as market participants questioned how such a reserve would function.
Key concerns include:
- How will the US government acquire and store crypto?
- Will Congress approve such a reserve, and how will it be funded?
- Could this lead to increased regulatory scrutiny on Bitcoin and other cryptocurrencies?
Economist Peter Schiff called the announcement a “pump and dump scheme”, even demanding a congressional investigation into Trump’s Truth Social posts, which he claims caused the largest crypto rug pull of all time. While political narratives are adding uncertainty, traders are focusing on whether Bitcoin can establish a new price range or face deeper losses.
Bitcoin’s Next Move: Will BTC Rebound or Test $73,000?
With Bitcoin currently trading at $83,900, the market is at a critical juncture. If BTC can hold $83,000–$85,000, a bounce toward $90,000–$92,000 is possible. However, failure to maintain this level could lead to a sharper decline, with $75,000–$73,000 as the next major support zone.
Bitcoin’s next move will likely depend on three key factors:
- Institutional flows – If ETF outflows continue, BTC may struggle to find support.
- Macroeconomic conditions – Trade war fears and inflation concerns could keep investors away from speculative assets.
- Technical levels – Holding $83,000–$85,000 is crucial for a potential rebound.
While Bitcoin remains highly volatile, history has shown that major corrections often lead to new highs once fear subsides. Traders should watch key levels carefully to determine whether BTC is ready for a new rally or a deeper decline toward $73,000.
