Bitcoin price steadied slightly today after an early drop to $86,000 over the weekend as traders weighed Federal Reserve risk, heavy recent liquidations and mounting technical pressure.
The major cryptocurrency was up about 1% at $87,850 by mid-afternoon, after falling as low as $86,000.13 earlier in the session. Price developments remained volatile, with market participants wary of sharp reversals following a weekend sell-off.
Attention is now focused on the Federal Reserve’s policy decision due on Wednesday. The central bank is widely expected to keep interest rates in the 3.50%-3.75% range, but the meeting has come under unusual scrutiny amid the debate over the Fed’s independence.
Recently, President Trump’s administration escalated its battle with Federal Reserve Chairman Jerome Powell by launching a rare criminal investigation threat linked to Powell’s oversight of a major Fed renovation project.
At the same time, Trump is pushing to reshape central bank leadership as Powell’s term ends this spring, drawing legal setbacks (including a Supreme Court case over Trump’s attempt to remove a Fed governor) and fueling a broader debate about the Fed’s independence from policy.
Crypto markets continue to absorb the impact of continued sell-offs, which were exacerbated by forced liquidations across leveraged positions.
US-listed spot bitcoin exchange-traded funds remained a source of pressure. Spot bitcoin ETFs recorded $1.33 billion in net outflows in the week ended Jan. 23, the largest weekly outflow in nearly a year.
The redemptions have contributed to selling pressure against the background of already fragile market conditions.
Corporate bitcoin accumulation continued but failed to stabilize sentiment. Strategy., the software company that has switched to a leveraged bitcoin acquisition strategy, revealed in a recent SEC filing that it bought 2,932 bitcoins between January 20 and January 25 for approximately $264.1 million, paying an average of $90,061 per share. coin.
The firm now holds 712,647 bitcoin, with recent purchases primarily funded through its IPO program. These purchases did little to change the bitcoin price.
The company’s total purchase price for its holdings is approximately $54.2 billion, including fees and expenses, which equates to an average bitcoin acquisition price of $76,037.
Bitcoin price analysis
According to Bitcoin Magazine analysts saw the bitcoin price take a sharp bearish turn last week, closing the week near $86,588 after failing to hold momentum after a test of $98,000 resistance. The move marked a crucial loss of the $87,000 support level and shifted short-term market control back to the sellers.
The $84,000 level is now critical. A sustained daily close below this support could accelerate downside pressure towards the $72,000-$68,000 zone, with a deeper retracement towards $58,000 possible if selling intensifies.
Bulls are expected to aggressively defend $84,000 to avoid a broader breakdown.
On the upside, buyers need to reclaim $88,000 first to stabilize price action. Additional resistance is at $91,400 and $94,000, while $98,000 remains a major ceiling. A move above this level is considered unlikely in the near term, although a breakout could open a path towards $103,500.
Technical indicators reinforce the bearish outlook. Bitcoin price closed below the 100-week simple moving average, the MACD remains in bearish territory, and the relative strength index has turned lower again.
The coming week is crucial, with broader market earnings potentially influencing sentiment, although correlations with equities remain uncertain.
At the time of writing, the Bitcoin Fear and Greed Index is currently at 20 out of 100, signaling extreme fear among market participants. Historically, periods of extreme fear have coincided with heightened uncertainty and, at times, potential buying opportunities as prices trade below perceived value.
Bitcoin price is currently $87,698. It is currently -1% from its 7-day record high of $88,635 and 2% from its 7-day record low of $86,126.