Bitcoin fell significantly on Monday following last week’s losses. Traders were cautious ahead of the US Federal Reserve’s expected interest rate decision later this week. Bitcoin fell 1.6% to $83,191.20 by 1:57 AM EST. The cryptocurrency also saw its largest weekly decline of more than 1%.
Financial market expectations heavily influence the cryptocurrency, as investors await the Federal Reserve’s meeting on March 18-19. Interest rates are expected to remain unchanged, which could maintain a cautious mood in the markets.
Economic Concerns and Tariffs
Cryptocurrency traders are particularly keen on potential comments from the Federal Reserve regarding the tariff policies imposed by former US President Donald Trump. These policies indicate potential impacts on inflation and economic growth. In December 2024, Bitcoin prices saw a significant surge, surpassing $108,000. Positive expectations regarding regulatory appointments supporting cryptocurrencies and the potential creation of a national reserve for Bitcoin drove this rise.
However, the Federal Reserve’s hawkish stance last December slowed interest in cryptocurrencies, negatively impacting investor incentives. Everyone is awaiting the next Fed meeting, as it will have an impact on the outlook for the global economy.
Cryptocurrency Exchange-Traded Funds Liquidation
Amid significant market declines, crypto asset manager 21Shares announced its decision to liquidate two of its exchange-traded funds (ETFs) by March 28. The decision includes the ARK 21Shares Active Bitcoin Ethereum Strategy ETF and the ARK 21Shares Active On-Chain Bitcoin Strategy ETF. Trading in these funds is expected to cease on March 27, with funds distributed to shareholders based on their fund holdings. This move comes at a time when markets are experiencing significant declines in cryptocurrency prices.
Bitcoin Whale: A Short Bet with Massive Leverage
At a time when Bitcoin’s price is experiencing significant volatility, one of the largest Bitcoin whales placed a $368 million short bet with 40x leverage. This short position was opened at $84,043 per Bitcoin and is subject to liquidation if the price exceeds $85,592. Data indicates that the Bitcoin whale has made unrealized profits of over $2 million, but faces financing fees exceeding $200,000.
Traders are closely awaiting the Federal Open Market Committee meeting on March 19, which is expected to have a significant impact on Bitcoin and similar assets. With a 98% probability of the Fed keeping interest rates steady, any signals from the Fed could significantly impact the cryptocurrency market.
Altcoins’ Impact on Markets
Most altcoins also declined on Monday. These coins were affected by the general market sentiment, with Ethereum’s price falling by 1.8% to $1,897.36. Other coins, such as XRP and Solana, also recorded significant declines of 2.4% and 5.1%, respectively.
Meme tokens such as Dogecoin and $TRUMP were also affected by the general market trend. Dogecoin fell by 2.4%, while $TRUMP’s price fell by 5.8%. These declines underscore the volatile state of the cryptocurrency market at the moment.
Risks Associated with Leverage in Crypto Markets
Leveraged trading carries significant risks for traders, as this type of trading allows investors to increase the size of their positions using borrowed funds. This method increases gains but also increases losses, especially during times of high market volatility. Recently, a trader made a whopping $68 million by opening a short position on Ethereum with 50x leverage, as the currency’s value fell by 11%. Despite the potential for huge profits, leveraged trading remains subject to numerous risks if economic conditions worsen or cryptocurrency prices change.
Bitcoin Futures Analysis for Today
Bitcoin Futures Price (BTC – Front Contract): $83,315
Daily Bias: Bullish above $82,800, Bearish below
Minimum: $82,800 (Thursday’s support level) and $82,944 (today’s VWAP support level)
Bitcoin futures found strong support below today’s volume-weighted average price (VWAP) at $82,944, in line with key technical levels. As long as the price remains above $82,800, the intraday trend remains bullish. However, if Bitcoin falls below $82,800, downside targets will emerge.
Bitcoin Technical Analysis: Support and Resistance Levels
Traders are closely monitoring Bitcoin’s support and resistance levels. The key support level for Bitcoin is $81,000, and if the price continues to hold above this level, it could indicate the currency’s resilience in the face of pressure. On the other hand, if the price falls below $76,000, we may see further selling pressure, which could lead to even deeper declines in the coming days.
The Impact of Trade Tensions on the Market
Cryptocurrency markets are heavily influenced by general economic conditions, including trade tensions. Potential changes in tariffs on global goods could exacerbate market uncertainty. Global markets are closely monitoring these changes because they impact the overall economy, which in turn impacts investor decisions in crypto assets.
It is clear that cryptocurrency markets, especially Bitcoin, are experiencing significant price volatility amid current economic and political challenges. Cautious anticipation of the Federal Reserve’s interest rate decisions is a key influencing factor.
Meanwhile, altcoin markets are experiencing significant declines, and leveraged trading remains a high-risk strategy that could lead to significant gains or losses under the current circumstances. While trade tensions and economic concerns continue to impact market sentiment, investors remain on the lookout for new opportunities and market developments in the coming period.
