Crypto News

Bitcoin Surges to $85,900 Before Trump’s Speech, but Faces Challenges Ahead: Analysis and Forecast

March 21, 2025
Smart Money

Bitcoin Price Updates: 10-Day Peak Followed by a Brief Decline Post-Trump Speech

March 20, 2023 – Bitcoin (BTC) reached a new ten-day high of $85,900 on Thursday, March 20, just ahead of a highly anticipated speech by former US President Donald Trump at Blockwork’s Digital Asset Summit. Following the address, however, the cryptocurrency experienced a notable drop, falling approximately 4% to a low of $83,400 within hours.

Market Reaction to Trump’s Speech

During his address at the summit, Trump reiterated his endorsement of the cryptocurrency sector and expressed intentions to push forward the proposed Crypto Strategic Reserve initiative. Despite his supportive comments, the market seemed to have already absorbed much of this information from earlier discussions and rallies over the past month, leading to a lack of new bullish momentum after the speech.

The immediate aftermath of Trump’s remarks saw Bitcoin’s value retract to $83,600, forming what is characterized as a long upper shadow on the price chart—an indication of rejection at higher levels and a potential signal of a bearish trend.

Derivatives Market Insights

Despite the dip following the speech, data from derivatives trading provide a counterpoint to the bearish sentiment. The liquidation heatmap revealed that Bitcoin experienced a total of $159.59 million in liquidations within the past 24 hours. Notably, short positions accounted for $90.66 million of this total, exceeding long liquidations, which stood at $68.94 million.

This divergence suggests that while the short-term outlook for Bitcoin remained cautious post-speech, traders betting against the cryptocurrency were increasingly getting squeezed out of their positions, lending some stability to the market. This trend is contrasted with broader crypto-market liquidations, where longs amounted to $171.38 million, slightly surpassing shorts at $168.26 million.

On-chain data had also highlighted a $14 billion uptick in substantial Bitcoin transactions leading up to the Federal Reserve’s decision to pause interest rate hikes, indicating persistent institutional appetite for Bitcoin.

Consolidation and Future Projections

Looking ahead, analysts suggest that a consolidation period above the $82,000 support level might be instrumental for Bitcoin to gain momentum toward the $90,000 mark. The recent pattern of short liquidations exceeding long liquidations offers promising signals that could indicate strong buying pressures at critical support levels.

Bitcoin’s price is now stabilizing within a range between $83,600 and $85,900, with notable resistance appearing near the upper Bollinger Band set at $92,252. Conversely, the lower Bollinger Band, marking a critical support at $78,065, will be crucial should selling pressures escalate.

Technical indicators such as the Parabolic SAR suggest underlying bullish support, although the Average Daily Range (ADR) indicates a current dip in volatility, underscoring the necessity for a surge in trading volumes to facilitate a decisive breakout.

Potential Scenarios

In a favorable scenario, a reclaiming of the $86,000 threshold with robust trading volumes could catalyze Bitcoin’s ascent toward the $90,000 resistance zone. On the other hand, should Bitcoin fail to maintain levels above $84,000, a retest of the $80,000 to $78,000 range could be on the horizon, raising potential risks for further declines toward $76,600 should whale accumulation slow.

With an ever-evolving market landscape, investors are urged to remain informed and conduct thorough research before making any investment decisions. Similar fluctuations and volatility underscore the inherent risks associated with trading cryptocurrencies.