Bitcoin Dips Below $100K Amid Market Volatility
By: Eva Baxter
The cryptocurrency market is witnessing significant turbulence as Bitcoin (BTC) loses its $100,000 milestone, dropping by a staggering 6.4% in the past 24 hours. This decline has brought the price of the leading cryptocurrency down to $97,000 at the time of writing. Bitcoin's descent was marked by a low of $96,233 before the market attempted a recovery, causing substantial liquidations in the crypto derivatives market, which recorded nearly $1.2 billion in the process. This downturn has resulted in a 9% reduction in the overall market cap of cryptocurrencies, now standing at $3.63 trillion.
The fall in Bitcoin's price appears to be a reaction to Federal Reserve Chairman Jerome Powell's recent comments on the pace of US interest rate cuts planned for 2025. Powell indicated potential rate cuts may be slower and contingent upon positive market data and inflation rates stabilizing at 2%. Meanwhile, Ethereum (ETH), one of the major altcoins, mirrored Bitcoin's decline, trading at $3,372 after a 10% collapse. Similarly, Solana (SOL) recorded a sharp drop to $187. Notably, Chainlink (LINK) and Dogecoin (DOGE) faced steeper corrections, declining by 17.3% and 18%, respectively.
This downturn also coincides with political turmoil in the United States as President-elect Donald Trump challenges a congressional spending bill aimed at preventing a government shutdown. Trump's rejection of a bipartisan measure to extend government funding through March 2025 adds a layer of uncertainty to an already shaken market. Without an agreement, a partial government shutdown could disrupt federal services and delay paychecks, while Trump's proposal to eliminate the national debt ceiling introduces further complexity.
Bitcoin's price had previously sought to capitalize on higher gains, targeting the $108,000 resistance zone. However, it faced resistance at critical levels, including $104,000, falling below the 100 hourly Simple Moving Average. As the market consolidates, attention turns to resistance levels at $100,500 and $101,000, along with support zones around $98,000, which may bolster Bitcoin's price against further declines. Should these support zones falter, deeper levels around $96,200 and $95,500 could be tested.
Despite the immediate market challenges, positivity remains for future developments. Economic indications, geopolitical stability, and technological advancements continue to hold the potential for recovery and further progress in the cryptocurrency space, with industry watchers keenly observing ongoing market dynamics to gauge the next significant movements.
