The price of Bitcoin has fallen below $25,000 for the first time since March 17, following a decision by the Federal Reserve to pause interest rate hikes. The price dropped by 4% from $25,867 to $24,819 within a span of 30 minutes, although Bitcoin had regained some ground and was trading just above $25,000.
The digital currency’s price broke through the critical support zone, leading to the erosion of a seven-month trendline. As of right now, Bitcoin was trading at $24,878, and the total crypto market cap had fallen by 3.8%.
In the week prior to this dip, Bitcoin had been hovering around the $26,000 mark as the market responded to the Securities and Exchange Commission’s legal action against major crypto exchanges Coinbase and Binance, as well as increased macroeconomic uncertainty related to signals from the Federal Reserve about interest rates.
The sharp drop in Bitcoin’s price came about three hours after the Federal Reserve announced a pause on interest rate hikes, which it had been implementing over the course of 15 months to combat inflation.
Although the market was largely expecting this pause, a statement from the Federal Open Markets Committee suggested further rate hikes in the future, which often curbs investor enthusiasm for risk assets like cryptocurrencies.
Analysts have different opinions on the short-term future of Bitcoin’s price.
For instance, a crypto analyst called Captain Faibik , suggests that this decline puts bulls at risk of further downturns, with a potential for the bears to take control. If the bears do seize control, Bitcoin could be pressured to new lows, possibly testing the $20,000 – $22,000 region.
On the other hand, if this price dip is a trap and Bitcoin bounces back, the analyst predicts a bullish rally towards $31,000, assuming it can reclaim the $26.7k resistance.
$BTC Bulls have lost the 7-Month Major Trendline, Not a good Sign..!!
Is it a TRAP or Bears are Back in the Town?? 🤔
– If it’s a trap and Bitcoin bounces back, Reclaiming the 26.7k Resistance, we could witness a Bullish Rally towards 31k.
– If Bears are back, Bitcoin may… pic.twitter.com/j4ZZeCXuJi
— Captain Faibik (@CryptoFaibik) June 15, 2023
Another analyst, Ali, highlighted the most critical support area for Bitcoin in the $22.7k – $23.6k range. Ali also pointed out the main resistance zone between $26k and $28.3k, suggesting a potential bounce could see Bitcoin reclaim this zone and possibly retest the $30k area.
Crypto analyst Rekt Capital suggested that while the sub-$25k level offers a potential buying opportunity, the loss of the $26,600 support could turn it into a firm resistance, implying that the lower $20,000s may be on the horizon if this level is rejected after the weekly close.
Another analyst Marcel Pechman suggests that the current options data for Bitcoin indicates a further slide to the downside, especially when considering the regulatory hostility towards the crypto industry in the U.S. and the likelihood of further rate increases from the Federal Reserve in the coming months.
Other cryptocurrencies have also been affected by this bearish sentiment. Ethereum, the second largest cryptocurrency by market cap, fell more than 6% from $1,740 to $1,631. Altcoins, including those named in the SEC’s lawsuits as securities, also experienced losses, with Cardano (ADA) down 6.8%, Polygon (MATIC) down 7.7%, and Solana (SOL) down 4.2%.
