Kevin Warsh’s nomination as a potential Chair of the Federal Reserve has significantly boosted the strength of the US dollar. This has led to a major rally in the US dollar, making dollar-denominated assets such as Bitcoin, gold, and silver more expensive for global investors. As a result, there has been a synchronized selling action across various hard assets.
Market conditions have been further exacerbated by liquidity that has not fully recovered since the market crash on October 10. Kaiko data shows that market depth—the indicator of the market’s ability to absorb large transactions—is still more than 30% below the October peak. Order books have not fully recovered, while the spread between bid and ask prices is wider than normal.
From a technical perspective, Bitcoin’s movement on Saturday showed significant pressure. The price failed to hold at the crucial support level of USD 82,500, closely monitored by technical analysts. The breach of this level triggered further selling action, both from algorithmic trading systems and manual traders.
Bitcoin also broke below the upward trend line that had formed since late December. Furthermore, the price fell below the 50-day exponential moving average (EMA) around USD 75,500, which now serves as a resistance area.
For the first time since October 2023, Bitcoin also dropped below the realized market value at the USD 80,700 level, which is the average buy price for all Bitcoin holders. This situation has put the majority of market participants in a losing position, increasing the risk of panic selling.
