Bitcoin price dropped by 5% in a 24-hour period on March 20, reaching a 14-day low of $60,761. This decline indicates potential further downside according to critical market data trends. Short-traders are currently dominating the BTC derivatives markets as they prepare for the upcoming US Federal Reserve rate announcement.

The price of Bitcoin has been in a downward trend since hitting an all-time high of $73,840 on March 14. Market demand has been stagnant as investors await the Fed rate announcement scheduled for 2 pm Eastern time on March 20. Following the release of higher-than-expected inflation data last month, BTC short traders have been increasing leveraged positions in anticipation of more price declines.

Coinglass’ liquidation map reveals the extent of leverage that traders have taken on their speculative positions, indicating a significant concentration of short positions. As of March 20, short traders have accumulated leveraged positions exceeding $2.43 billion, while long leverage contracts stand at $943 million.

The majority of traders are expecting the next rate announcement to trigger further price declines in the coming days. If Bitcoin’s price drops below the $60,000 mark, there could be over $641 million in liquidations, potentially leading to more losses.

However, historical accumulation trends suggest that the $60,000 – $61,900 range has been a significant accumulation zone for existing Bitcoin holders. This could lead to increased demand at that price range, preventing a dip below $60,000. If the key support level fails, BTC price could decline towards the $55,500 mark before finding stronger demand.

On the upside, if the Fed hints at earlier-than-expected rate cuts, it could stimulate demand for Bitcoin, particularly among corporate investors sensitive to regulations. This could create resistance at the $65,100 mark, where a significant number of addresses have acquired BTC. Short-traders could face substantial losses if prices rise above $65,000, leading to intensified selling pressure to avoid liquidations.

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