Bitcoin Struggles to Hold $87K as Macroeconomic Headwinds Mount Pressure on Bulls
Bitcoin is under a lot of pressure right now. It traded above $87,000, down 1.2% in the last 24 hours, and several macroeconomic factors
Quick overview
- Bitcoin is currently under pressure, trading at $87,000 and down 1.2% in the last 24 hours due to macroeconomic concerns.
- The cryptocurrency experienced a tough weekly close, with long position liquidations exceeding $250 million as traders brace for volatility.
- Technical analysis indicates further downside risk, with key support levels at $86,300 and potential declines to the low $80,000s.
- Bitcoin's performance diverges significantly from traditional safe-haven assets like gold, which has risen 83% over the past year.
Bitcoin BTC/USD is under a lot of pressure right now. It traded above $87,000, down 1.2% in the last 24 hours, and several macroeconomic factors might push the leading cryptocurrency into a deeper fall. Technical signs show that further losses may be on the way as traders prepare for a week of volatility.
Weekly Close Signals Bearish Momentum
On Sunday, the world’s biggest cryptocurrency had a tough weekly closing, plummeting to multiday lows of $87,471 on Bitstamp as long position liquidations topped $250 million in 24 hours. The sell-off is happening because the markets are getting ready for a bunch of bad news, like the danger of a US government shutdown, President Trump’s aggressive tariff threats against Canada, and the Federal Reserve’s decision on interest rates on January 28.
Market analysts say there are a lot of problems ahead. The CME Group’s FedWatch Tool shows that there is only a 2.8% chance of a rate cut at the next FOMC meeting, which is bad news for traders who were hoping for more flexible monetary policy. Political instability and stubborn interest rates have made the market risk-off, which has hurt high-beta assets like Bitcoin the most.
BTC/USD Technical Analysis Points to Further Downside Risk
From a technical point of view, Bitcoin’s chart structure is showing indicators that are bad for bulls. Trader CrypNuevo pointed out that BTC is currently falling below the mid-range level, which is a sign that it could keep going down to the range lows. The most important support level to keep an eye on is $86,300, where a lot of liquidity has built up in the exchange order book.
Bitcoin has not been able to stay above $89,000 and is presently trading below both $88,200 and the 100-hour simple moving average. The hourly chart shows a bearish trend line with resistance at $88,000, which confirms the gloomy prognosis for the foreseeable future. The Relative Strength Index (RSI) is now below 50, and the MACD indicator is losing momentum in a bearish area.
Key resistance levels are around $88,500, which is the 50% Fibonacci retracement level, and then at $89,200 and $90,000. On the downside, immediate support is at $86,700, while larger support zones are at $86,200 and $85,500.
BTC’s Widening Divergence with Traditional Safe Havens
The fact that Bitcoin is so different from other safe-haven assets is probably the most worrying thing for Bitcoin bulls. Bitcoin has dropped 17% in the last year and is now 30% below its top of $126,000 in October. Gold XAU/USD, on the other hand, has risen 83% in the same time period, just breaking above the $5,000 mark to reach $5,080. Silver [[XAG/USD]] has also gone up 48% this year, reaching $107 per ounce for the first time ever.
This difference goes against the idea that Bitcoin is “digital gold” and shows that investors are choosing traditional precious metals instead of Bitcoin because of trade and geopolitical problems. Jeff Mei, the chief operating officer of the BTSE exchange, says that the possibility of a government shutdown and Trump’s threats of tariffs are making global investors move away from US Treasuries and toward gold, while cryptocurrencies are being sold off.
Bitcoin Price Prediction: Bears Target Low $80,000s
Bitcoin’s short-term outlook is mostly negative based on current technical and fundamental variables. According to CrypNuevo’s estimate, the most likely outcome is that Bitcoin will sink back to the low $80,000s in the next few weeks. Any short-lived price rises could be good chances to short.
If Bitcoin can’t get back above the $88,500 resistance level, it looks like it will fall to $85,500, and if it stays weak for a long time, it might possibly go to $83,500 or $82,500, which would be the main support zone. If the price drops below $82,500, it could cause capitulation selling, which would make any recovery attempt take a lot longer.
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