Bitcoin and the global cryptocurrency market faced a sharp decline as concerns over the U.S. economy pushed investors into panic mode. Bitcoin dropped to $76,000
The global cryptocurrency market, led by Bitcoin, faced a sharp decline on Wednesday as concerns over the U.S. economy pushed investors into panic mode, leading to a massive liquidation of crypto traders.
Bitcoin dropped to $76,000, its lowest level in four months, causing traders to lose $952 million in just 24 hours. The cryptocurrency has been falling for five days in a row, marking a significant shift in the market.
Analysts at Arcane Research noted that Bitcoin fell from $80,000 to $77,000 as the chances of a U.S. recession rose to 40%. At the same time, there is speculation that former President Donald Trump’s policies may be influencing market movements to push the Federal Reserve into cutting interest rates.
Market expert Anthony Pompliano suggests that recent stock market instability, partly caused by Trump’s tariffs, could be putting pressure on Fed Chair Jerome Powell to lower borrowing costs.
"After Trump's administration imposed tariffs on $250 billion worth of Chinese goods, leading to a surge in consumer prices, and Trump threatened to delist Chinese companies from U.S. exchanges, the stock market experienced significant turbulence," Pompliano stated.
This pressure, combined with the 10-year Treasury yield falling from 4.8% in January to 4.21%, leads many to believe that the Federal Reserve may soon adjust its monetary policy. This could have a major impact on both the stock market and cryptocurrencies.
As for Bitcoin, it fell to $76,900, remaining slightly above the 50-week Exponential Moving Average (EMA) at $73,750. However, a continuation of the selling could push the price lower, with the next relevant support level at $73,750, an important support from March 2024.
But if buyers step in and manage to increase the price above $80,000, BTC could recover and aim for the next resistance at $85,000.
