Bitcoin is trading around $83,000-$84,000, with a potential for significant short liquidations at $90,000 that could amount to $9.41 billion. The cryptocurrency has shown various influences on its price, including economic factors and investor sentiment during a time of controlled inflation. Market analysts are presenting mixed predictions amidst shifting dynamics.

Bitcoin’s price has recently shown modest increases, currently trading between $83,029 and $84,340. However, it remains below previous peak levels, raising concerns among market participants as the cryptocurrency approaches crucial thresholds that may lead to mass liquidation events. The analysis indicates that if Bitcoin reaches $90,000, it could trigger liquidations of short positions amounting to approximately $9.41 billion, prompting shorts to close positions as market dynamics shift against them.

Notably, the crypto market is observing a significant concentration of short positions in the $80,000 to $90,000 range, with the $90,000 mark identified as a major risk zone. Analyst Seth points out that a past increase to $87,000 already resulted in the closure of $77 million worth of short positions, indicating the potential for a short squeeze should Bitcoin ascend further.

While some analysts attribute Bitcoin’s price fluctuations to the impact of the ongoing US-led trade war, it is crucial to recognize that Bitcoin’s struggles began prior to these tensions. The cryptocurrency has faced challenges in maintaining momentum above $100,000 for months before the tariff discussions intensified. During this time, institutional interest in Bitcoin remained strong, reflected by $2.75 billion in net inflows into spot Bitcoin ETFs despite trade war escalations.

Inflation trends have significantly influenced Bitcoin’s performance. Recent measures indicate a contained inflation rate, with the US Personal Consumption Expenditures Price Index rising by 2.5% year-over-year and the eurozone Consumer Price Index increasing by 2.2% in March. The decrease in inflation rates could shift investor focus towards real estate and stocks, detracting from Bitcoin’s appeal as an inflation hedge.

Additional economic indicators, such as declining job openings in the US and low Treasury yields, signal a growing risk aversion prevalent among investors, typically unfavorable for high-risk assets like Bitcoin. Market experts predict a potential price drop to a support zone ranging from $78,692 to $70,000 before Bitcoin might target $94,655.

As Bitcoin stabilizes between $83,000 and $84,000, the market remains vigilant regarding both imminent liquidation triggers and broader economic trends. The upcoming weeks could be critical for Bitcoin as it approaches significant price levels in an unpredictable landscape.

In summary, Bitcoin’s current trading range indicates significant market attention as it approaches pivotal price levels. The potential for short liquidations at $90,000 could force upward price movements, contrasting with prevailing economic trends that underscore a moderate inflation environment. As various factors influence investor sentiment, Bitcoin’s ability to maintain support above critical thresholds will be crucial in the weeks ahead.

Original Source: moneycheck.com

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