Bitcoin Price Volatility After Trump's Cryptocurrency Speech: Market Analysis

Bitcoin price volatility remained highly volatile on Thursday, March 20, when former U.S. President Donald Trump spoke at Blockwork's Digital Asset Summit. Initially, BTC skyrocketed to a 10-day high of $85,900 before experiencing a sharp 4 percent drop to $83,400. Despite this decline, futures market indicators suggest that a significant trend reversal is not high. Why did Bitcoin fall after Trump's speech? Trump expressed strong support for the cryptocurrency industry, reinforcing his commitment to policies prioritizing digital assets, including the proposed cryptocurrency strategic reserve. However, the market had largely priced in this positive sentiment from previous rallies, resulting in a "sell the news" reaction rather than continuing the bullish momentum. An important technical pattern has appeared on the BTC price chart—a long upper shadow—indicating rejection at higher levels. This often signals short-term bearish sentiment, reinforcing the potential for a price correction. Moreover, the trading volume of Bitcoin after the fall is also significantly lower compared to the previous session, indicating that this sell-off lacks the necessary momentum for a more substantial downward trend. The derivatives market signal indicates an optimistic sentiment. Despite the fall of Bitcoin, data from the derivatives market shows that optimism still remains. Upon further examining the liquidation statistics, we see that $159.59 million worth of Bitcoin positions have been liquidated in the past 24 hours. Notably, short positions accounted for $90.66 million, surpassing $68.94 million in long liquidations. Across the broader cryptocurrency market, the total liquidation amount reached $339.64 million, with long positions closing at $171.38 million, slightly higher than the short liquidations at $168.26 million. This movement indicates that bearish bets are facing increasing pressure from short liquidations, which may contribute to new buying momentum. The demand of the organization signals long-term strength. On-chain data shows that large Bitcoin transactions surged to $14 billion ahead of the Federal Reserve's interest rate decision, indicating increased institutional participation. This accumulation by wealthy investors reflects confidence in Bitcoin's long-term trajectory, despite short-term price volatility. Moreover, the liquidation heatmap of Bitcoin highlights key support levels where buying pressure remains strong, reinforcing the potential to continue towards higher price targets. Technical Outlook: Can Bitcoin regain the $90,000 level? To maintain its upward momentum, Bitcoin must break through the resistance level of $90,000 with high trading volume. If BTC consolidates above $85,000 in the coming days, it could signal new strength, potentially setting the stage for another breakout. Conversely, failing to maintain the current support level could lead to further corrections, where $80,000 is a significant psychological level that buyers need to protect. Conclusion While the fall after Bitcoin's speech reflects short-term profit-taking, derivative and on-chain data suggest that the underlying bullish sentiment remains intact. The accumulation by institutions and short liquidations at key support levels indicate potential for continued increases. Investors should closely monitor Bitcoin's ability to reclaim the $85,000 level and progress towards the $90,000 level to confirm a new bullish trend.