Bitcoin (BTC) climbed to a high of $94,416 early on Monday before erasing newfound gains and dropping under $90,000 support. Market movers and recent bullish developments, such as the United States (US) strategic reserve announcement, the upcoming crypto summit at the White House and BlackRock’s announcement regarding portfolio allocations, failed to catalyze a sustainable rally in Bitcoin.
Why Bitcoin is back under $90,000
Crypto traders observed heightened volatility in the Bitcoin price on Monday as market participants digested the news of Trump’s US crypto strategic reserve announcement and anticipated positive developments at the upcoming crypto summit on Friday.
The Bitbo Bitcoin volatility index tracks the volatility of the BTC price in US Dollars. The index shows a spike in volatility between February 23 and March 2. Volatility has climbed from 1.53% to 2.06%.
Typically, positive developments in the market tend to push Bitcoin prices higher.However, during periods of heightened volatility, BTC could swing either way. Therefore, BTC is likely to correct once the “hype” or “speculation” narrative fades, among other market movers.
Close to the $90,000 support, specifically between the $88,118 and $92,035 levels, traders hold over $34.83 billion worth of Bitcoin. If the price drops unexpectedly, these wallet addresses are likely to be pushed underwater, meaning they could face unrealized losses on their BTC holdings, according to IntoTheBlock data.
The $90,000 level is, therefore, a key support for Bitcoin as the crypto attempts to recover and rally towards the $100,000 milestone.
