The cryptocurrency market is currently experiencing a significant downturn, with Bitcoin approaching the critical support level of $94,000. The global cryptocurrency market cap has dropped to $3.2 trillion, representing a nearly 10% decrease in just one day.
This sudden decline follows Bitcoin’s recent peak above $108,000 last Tuesday, with its value now retracing back to the $94,000 level. The drop in price coincides with statements made by Federal Reserve Chairman Jerome Powell. In his latest remarks, Powell clarified that the central bank has no plans to invest in BTC, contradicting earlier speculation fueled by former President Donald Trump’s remarks. Powell also suggested that there may not be any further interest rate cuts until 2025.
The cryptocurrency community has been abuzz with speculation in response to Powell’s comments, leading to debates about whether the current market correction is a normal part of the market cycle or if it signals the end of the bullish trend that began after Trump’s presidency.
Even before Trump’s election, Bitcoin’s price was already increasing due to changes in the Federal Reserve’s monetary policy, which had started to lower interest rates. The initial 50 basis point cut resulted in higher prices for assets like bitcoin. However, the anticipation of an additional 25 basis point cut last Wednesday did not lead to further gains. Instead, the possibility of a policy shift caused a sharp decline in prices, impacting BTC and the overall cryptocurrency market significantly.
Analysts emphasize the importance of the $94,000 support level for Bitcoin’s immediate future. If this barrier is breached, the price of the asset could drop to $90,000, potentially reaching as low as $80,000.