Bitcoin Price Jumps to $85,900: Can BTC Break Through $90K or Will It Face Further Resistance?
Bitcoin's (BTC) price surged to a new 10-day peak of $85,900 on Thursday, March 20, as anticipation built around U.S. President Donald Trump's address at the Digital Asset Summit. While the market reacted with excitement, reaching a brief high of $85,900, the cryptocurrency quickly retreated by 4% to $83,400 after Trump’s speech. This volatile price action, while significant, highlights the ongoing uncertainty in the market. But despite this short-term dip, Bitcoin's long-term outlook may still be promising, with key technical and derivative indicators suggesting that the bullish trend might continue. However, the key question remains: Can Bitcoin manage to break through the critical $90,000 resistance level, or will it face a setback?
Why Bitcoin Price Tumbled 4% After Trump’s Speech at Blockwork’s Crypto Summit
Bitcoin's brief dip came after Trump's speech at the Digital Asset Summit, where he reiterated his support for the cryptocurrency sector, mentioning plans to advance the proposed Crypto Strategic Reserve initiative. However, despite the anticipation surrounding Trump's remarks, his speech largely reiterated previously known positions, leaving the market with little fresh news to push Bitcoin higher.
Following the speech, Bitcoin's price dropped to $83,600, marking a 4% decline from the day's high. The price action left behind a long upper shadow on the candlestick chart, indicating rejection at higher levels. This suggests that, while Bitcoin has strong support levels, it is encountering resistance in the short term, and a continuation of this pattern may signal the start of a bearish trend. However, the lack of significant selling volume post-speech suggests that the sell-off might not be strong enough to trigger a large-scale price correction.
Derivatives Market Signals Suggest Bullish Dominance Despite Mild Dip
While Bitcoin saw a short-term dip, the derivatives market data paints a more optimistic picture for the cryptocurrency. According to the liquidation heatmap, Bitcoin recorded $159.59 million in total liquidations over the past 24 hours. Interestingly, short positions accounted for a higher proportion, totaling $90.66 million, surpassing the long liquidations of $68.94 million. This suggests that Bitcoin's short-term traders are still predominantly bullish, with more shorts being squeezed out of the market. The liquidations in the futures market indicate that despite the recent dip, the broader market sentiment remains positive.
Additionally, the surge in large BTC transactions leading up to the Federal Reserve’s interest rate pause reflects robust institutional demand, further supporting the notion that Bitcoin remains attractive to long-term investors. While Trump's speech didn't generate immediate bullish momentum, the continued support from institutional investors and Bitcoin’s dominance in the derivatives market suggest that the rally may have more room to grow.
Bitcoin Price Forecast: Consolidation Above $82,000 Could Trigger $90K Rally
Bitcoin’s price action is currently stabilizing within a range between $83,600 and $85,900, with resistance near the upper Bollinger Band at $92,252. The lower Bollinger Band, positioned at $78,065, provides crucial support should selling pressure intensify. The Parabolic SAR indicator remains below BTC’s price action, reflecting underlying bullish momentum.
However, Bitcoin needs a volume surge to break through these resistance levels. The Average Daily Range (ADR) at 0.80 suggests that volatility is decreasing, and a surge in trading volume is essential for sustaining any breakout attempt. In the near term, a consolidation above the $82,000 support level could act as a springboard for a rally toward the $90,000 resistance zone.
A breakout above $86,000, combined with increasing volume, could be a key signal that Bitcoin is poised for a significant move higher. On the flip side, if Bitcoin fails to hold above $84,000, a retest of the $80,000–$78,000 range is likely, with the possibility of further downside toward $76,600 if the accumulation by whales slows.
Bitcoin's Supply Squeeze: What Does It Mean for Future Price Movement?
Bitcoin's "hot supply," which refers to BTC moved or transacted within the last seven days, has been steadily declining, dropping from 5.9% to 2.8% in just three months. This decrease in circulating supply indicates that fewer Bitcoin units are being actively traded. A shrinking supply could result in tighter market liquidity, making it more difficult to purchase large amounts of Bitcoin. With fewer Bitcoin available for trading, a supply squeeze could push prices higher, especially if demand remains steady or increases.
The decrease in Bitcoin's hot supply suggests that long-term holders are accumulating Bitcoin, reducing selling pressure in the market. This accumulation trend is bullish, as it indicates confidence in Bitcoin's long-term value. The tightening supply further adds to the bullish outlook, as fewer coins available for exchange could lead to a price increase due to scarcity.
Bitcoin Margin Trading: Is Leverage Fueling the Current Rally?
Bitcoin's margin market also shows a significant increase in leveraged positions. On March 20, Bitcoin margin positions on Bitfinex surged to their highest level in nearly six months, with a 27.5% increase in margin longs since February 20. While leveraged positions typically introduce risk into the market, the increase in margin longs suggests that traders are betting on Bitcoin’s price appreciation.
However, Bitcoin’s price does not always move in tandem with leveraged positions. In previous instances, large increases in margin longs did not always lead to price increases, indicating that leveraged positions may not always result in upward pressure on Bitcoin's price. Therefore, while margin long positions are growing, they do not guarantee that the price will continue to rise in the immediate term.
Bitcoin Options Market: A Balanced Risk Outlook
Bitcoin's options market also reflects a more balanced risk outlook. The 30-day options delta skew has shifted to a neutral stance, suggesting that market makers and large investors are pricing similar risks for both upward and downward price movements. This indicates that, while there is still bullish sentiment in the market, traders are also hedging their positions in case of a correction.
In the past, a positive delta skew would have indicated a strong bullish sentiment, while a negative skew suggests a bearish outlook. However, the current neutral stance in the options market highlights that investors are uncertain about Bitcoin's near-term price direction, further emphasizing the importance of volume and market liquidity for sustaining any breakout.
Will Bitcoin Continue Its Upward Momentum Towards $90K?
Bitcoin’s short-term price action is characterized by consolidation, with resistance levels around $85,900 and the $90,000 zone. Technical indicators, such as the Parabolic SAR, suggest underlying bullish momentum, but the lack of volatility suggests that a surge in trading volume is necessary for Bitcoin to break above these resistance levels.
The liquidation heatmap indicates that Bitcoin’s short-term traders are largely bullish, with more shorts being squeezed out of the market. This suggests that the current rally may have more legs to run, provided Bitcoin can maintain consolidation above the $82,000 support level. If Bitcoin fails to hold this level, it could experience a pullback toward the $78,000 range.
In conclusion, while Bitcoin has shown resilience in the face of external market factors, including Trump’s speech and the Federal Reserve's rate decisions, the cryptocurrency’s ability to break through the $90,000 resistance zone will depend on a combination of sustained institutional demand, a decrease in Bitcoin’s hot supply, and a surge in trading volume. Market observers should remain cautious and watch key support and resistance levels, as well as trading volumes, for signs of an impending breakout or correction.
