Bitcoin (BTC), the most valuable cryptocurrency in the world, was extremely volatile after the Federal Reserve’s (Fed) most recent monetary policy decision, falling briefly below the $100,000 psychological level before making a full comeback. As investors process the Federal Reserve’s more cautious approach to rate decreases in 2025, the price action reflects broader market anxiety.
Bitcoin Down? $100K Secured
Bitcoin fell nearly $10,000 from its latest all-time high of $98,760. As market investors changed positions after the Fed’s aggressive guidance, risk assets sold down. Cryptocurrency prices reflect the intricate relationship between monetary policy and digital asset valuations. The Fed’s cautious approach to future rate cuts caused a rethink of risk holdings across asset classes after its third consecutive rate lowering. However, on Wednesday, Bitcoin slid 5.6%, testing levels below $100,000.
This was the biggest single-day drop since August 5, when the price fell 7% to $49,000. Today, Thursday, December 19, 2024, Bitcoin touched below $100,000 psychological support. It is currently trading at $101,600 on Binance, having somewhat rebounded. The November presidential election boosted the cryptocurrency by 50%. The president-elect’s pro-crypto position and Bitcoin reserve measures have changed market sentiment, but regulatory uncertainty remains.
$661 Million in Longs Vanished Bitcoin
According to statistics compiled, The cryptocurrency market has liquidated over $661 million worth of leveraged long bets in the last 24 hours. Ethereum ($109 million) and Bitcoin ($110 million) were the most heavily involved in these liquidations.
Bitcoin’s collapse drove a wider devaluation across the altcoin market. Ethereum, the first cryptocurrency, saw heavy losses as well, falling 4.4%; XRP, 5.4%; Solana, 2.5%; and Dogecoin, 5.6%. With Bitcoin’s contribution of more than $2 trillion, the overall market capitalization decreased to $3.7 trillion.
As volatility rises, traders in the options market are looking for ways to hedge their bets in the event of a loss. Experts in the market predict that prices could temporarily fall to the low $90,000 level shortly.
Will Bitcoin Keep Going Down?
The $100,000 level is an important support floor that bears will have difficulty breaking. Furthermore, the 20-day exponential moving average (20 EMA) offers short-term support to Bitcoin.
If the massive buildup of buy orders near $100,000 hadn’t occurred, the post-Fed decision movement would have been much more pronounced, and Bitcoin prices would be much lower now. Bitcoin has some breathing room at its six-figure value, in my opinion.
At the moment, the level of crucial resistance is almost $108,000, which was tested on December 15th, the last ATH. If Bitcoin falls below the current support, my attitude will change, but there’s no need to panic just yet. Among the many levels of support that lie ahead for Bitcoin, three particularly important ones stand out.
FAQs
How much did Bitcoin's price fall during the recent drop?
Bitcoin dropped nearly $10,000 from its all-time high, testing levels below $100,000 before partially recovering.
What is the current support level for Bitcoin?
The $100,000 level is a crucial support floor, with the 20-day exponential moving average offering short-term support.
How much was liquidated in leveraged long bets?
Over $661 million worth of leveraged long positions were liquidated, with Bitcoin and Ethereum seeing the highest amounts.
Will Bitcoin continue to drop in price?
While some experts predict further declines, the $100,000 support and buy orders suggest Bitcoin may hold its ground in the short term.
