Bitcoin Slides Into Weekly Close as Bulls Confront $86K Price Test

• Bitcoin trends downward amid escalating market concerns over potential macroeconomic volatility.

• Market analysis indicates downside risks significantly outweigh potential gains for Bitcoin.

• A potential bullish divergence with silver offers some hope.

Bitcoin Struggles amid Anticipated Macro Challenges

According to TradingView, BTC/USD experienced a 1.6% dip reaching $87,471 on Bitstamp. The majority of 24-hour crypto liquidations, which surpassed $250 million, were driven by long positions, based on data from CoinGlass. The Kobeissi Letter, a trading resource, pointed to the risk of another U.S. government shutdown as a factor weighing on markets.

The analysis advised its X followers to brace for significant upcoming events, including former President Donald Trump's tariff threats on Canada, macroeconomic data releases, and the Federal Reserve's upcoming interest rate decision on January 28. Although there is pressure from Trump for a rate cut, CME Group's FedWatch Tool currently suggests a minor probability of a 0.25% rate reduction. Kobeissi further noted that the approaching earnings season brings additional challenges.

Bitcoin Price Movements Present a “Potential Short Opportunity”

Among traders, the focus has shifted to Bitcoin’s trading range on low time frames. Trader CrypNuevo pointed out the bearish signal as Bitcoin's price dipped below mid-range, suggesting potential for further declines. Analyzing order-book liquidity, CrypNuevo identified a crucial support level for bulls at $86,300, predicting a possible decline to the low $80s due to ongoing high time frame liquidations and risks of a U.S. government shutdown. He proposed that any brief price increase could provide a short-selling opportunity.

Amidst prevailing bearish sentiments, some noted an increase in open interest leading up to the week's close. Crypto trader and analyst Michaël van de Poppe offered a positive outlook, highlighting a potential bullish divergence between Bitcoin and silver (BTC/XAG) for the first time in history on a three-day timeframe. Van de Poppe speculated that the upcoming high volatility could mark a bottom in this metric, potentially peaking silver, with money possibly rotating toward other assets.