Bitcoin price risks deeper correction as liquidation event triggers market shift
Bitcoin price tests 50 and 100 ema for the third time this week
Bitcoin price recent rally to a three-week high near $89,000 on March 24 met strong resistance at the Fibonacci golden ratio and the 100-day EMA, triggering a shift in market structure. Since then, Bitcoin has consistently posted lower highs and lower lows, signaling increased selling pressure.
Adding to the downward momentum, a liquidation event of $359.7 million in long positions has contributed to the shifting sentiment. Large-scale liquidations of leveraged long positions often force additional selling as traders are pushed out of the market. However, such clear-outs can also set the stage for a potential recovery, as over-leveraged positions are flushed, allowing new demand to emerge.
Bitcoin price tests 50 and 100 ema for the third time this week
BTC/USD price dynamics (March 2025). Source: TradingView
In today’s Asian session, Bitcoin dropped 1.77%, falling toward $86,100 in early European trading. The price is now testing the 50 and 100 EMA on the four-hour chart for the third time this week, a critical juncture that could determine short-term direction. A further decline could push Bitcoin below the four-day low of $85,800, with $84,400 emerging as the next key support level.
The four-hour RSI has now dipped into bearish territory, reflecting the current downside pressure. If Bitcoin fails to hold above the short-term realized price, it could indicate further weakness, potentially leading to a broader correction. Conversely, if the price stabilizes around these technical levels, it may signal renewed buying interest. Bitcoin’s near-term outlook hinges on its ability to hold above these key technical levels and whether demand can offset the recent wave of forced selling.
Bitcoin's rally lost momentum as softer U.S. inflation data and easing tariff concerns kept risk appetite intact. The price faced resistance, struggling to break above the Fibonacci golden ratio.
