Bitcoin Faces 'Significant Resistance' in Reclaiming $94K, Say Analysts

Bitcoin may encounter considerable challenges in reclaiming and maintaining the $94,000 price level, according to crypto analysts. After a failed attempt to surpass this milestone two days ago, analysts at Bitfinex warn that any recovery towards this level could face "significant resistance."

In a March 3 markets report, Bitfinex analysts noted that Bitcoin, which briefly surpassed $94,000 on March 1, struggled to maintain momentum and fell below that price point by March 2. At the time of reporting, Bitcoin was trading at approximately $87,190, and a return to the $94,000 mark would require an almost 8% price increase, based on CoinMarketCap data.

The Impact of Trump’s Crypto Announcement

The analysts linked Bitcoin’s current struggle to volatility driven by external factors, particularly U.S. President Donald Trump’s March 1 announcement about a crypto reserve. Following the announcement, Bitcoin surged by 12%, climbing from $85,000 to nearly $95,000. However, the excitement was short-lived, as intense selling pressure in the Bitcoin spot market quickly erased most of those gains.

The analysts suggested that this spot market sell-off had a significant impact on the price, and as a result, Bitcoin’s short-term trajectory remains uncertain. While there are no strong signals of an emerging uptrend, the market is also showing no clear indication that the downtrend has ended.

Short-Term Outlook: Potential for Further Downside

Pseudonymous trader Rekt Capital weighed in on the price action, stating in a March 4 post that while history suggests Bitcoin may have found a temporary bottom during this downside deviation, further declines are still possible. He noted that Bitcoin could stabilize around the $93,500 range in the coming days, but this does not rule out the possibility of another drop below that level.

Similarly, crypto analyst Axel Adler considered it a "good sign" that Bitcoin found support when it recently dipped to $81,000. However, there is still a sense of caution in the market as Bitcoin’s future price movements remain unpredictable.

Waiting for Genuine Buyers

Michaël van de Poppe, founder of MN Trading, suggested that Bitcoin’s price action could remain volatile in the short term, with key macroeconomic data and events likely influencing market sentiment. The U.S. Consumer Price Index (CPI) for February is due for release on March 12, just one week ahead of the Federal Reserve's interest rate decision on March 19. These events will likely play a crucial role in shaping Bitcoin's price in the coming weeks.

Kyle Chasse, founder of Master Ventures, echoed this sentiment, stating that Bitcoin’s price will continue to experience volatility until genuine buyers enter the market. According to Chasse, the market has been dominated by traders seeking arbitrage opportunities rather than long-term investors, which has contributed to current instability.

Market Sentiment: Extreme Fear

Sentiment in the market remains cautious, as reflected in the Crypto Fear & Greed Index, which has remained in the "Extreme Fear" category with a score of 20 since February 25. This suggests that investor confidence is low, further contributing to the ongoing volatility in Bitcoin’s price.

As Bitcoin continues to navigate this period of uncertainty, analysts and traders are closely monitoring key economic data and shifts in market behavior. The coming weeks could be pivotal in determining whether Bitcoin can regain its bullish momentum or whether further downside remains on the horizon.