Today's drop of Bitcoin below the $85,000 mark was a surprise to many, but there are specific market and political triggers behind it. Let's break down what happened in the last 24 hours.
1. FOMC Factor: Powell gave no chance for a rebound
The main blow was dealt by yesterday's FOMC report. The regulator not only kept the rate at 3.75%, but also confirmed a 'hawkish' stance. Market hopes for a rate cut in March have collapsed. Investors began to massively exit risky assets in favor of U.S. government bonds, the yields of which have sharply increased.
2. Geopolitical escalation and oil shock
Tensions between the U.S. and Iran have reached a peak in recent months. Oil prices have gone up, triggering fears of a new wave of inflation. Cryptocurrencies are trading today as a 'macro-barometer': at any threat of a major war, capital seeks refuge in gold, which has shown an increase today, while Bitcoin has lost more than 6% of its value in a day.
3. Liquidation cascade at $1.5 billion
The decline would not have been as deep if it weren't for the 'shoulders'. At the level of $88,000–$87,000, there was a huge concentration of long position liquidity. As soon as the price broke $87,500, an automatic liquidation cascade was triggered. Traders were forcibly closed out, pushing the price even lower until it found support at $84,416.
4. The Japanese factor and the Asian session
Interestingly, the most active selling occurred during the Asian session. Against the backdrop of yen volatility, Japanese institutions began to reassess their portfolios. Those who entered Bitcoin at the beginning of the year decided to lock in profits amid uncertainty.
"Trump factor: Between strategic reserves and trade wars"
Donald Trump himself has stoked the fire. On one hand, he continues to promote the 'Crypto-Market Structure' bill and promises to make the U.S. a crypto-capital. On the other hand, his tough foreign policy has caused panic.
Introduction of 25% tariffs against South Korea and harsh statements towards Iran have forced markets into a 'risk-off' mode. Bitcoin is falling today not because it has lost credibility, but because it has become a hostage of big politics. Add to this the news of a potential hack of U.S. government wallets — and you get the panic we observe on the chart.
Conclusion: What's next?
This is not just 'stop-loss hunting'. This is a clash of macroeconomics and politics. Bitcoin is currently in oversold territory (RSI around 41 on the daily chart), but a turnaround requires either positive news from Trump or calming in the Middle East.