The world’s
leading cryptocurrency, Bitcoin (BTC), experienced significant volatility
following the Federal Reserve’s (Fed’s) latest monetary policy announcement,
briefly dipping below the psychological $100,000 mark before staging a
recovery.
The price
action reflects broader market uncertainty as investors digest the Fed’s more
conservative approach to rate cuts in 2025.
Bitcoin
touched $98,760 in a sharp downturn that erased nearly $10,000 from its recent
all-time high (ATH). The movement coincided with a broader sell-off in risk
assets, as market participants adjusted their positions following
the Fed’s hawkish guidance.
The
cryptocurrency market’s reaction mirrors the complex interplay between monetary
policy and digital asset valuations. While
the Fed delivered its third consecutive rate cut, the central bank’s
cautious stance on future reductions triggered a reassessment of risk positions
across multiple asset classes.
“In support
of its goals, the Committee decided to lower the target range for the federal
funds rate by 1/4 percentage point to 4-1/4 to 4-1/2 percent,” Fed commented in
the official statement.
As a
result, Bitcoin fell by 5.6% during Wednesday’s session, testing
levels below the $100,000 mark. This marked the largest single-day drop
since August 5, when the price declined by 7%, hitting a low of $49,000. Today
(Thursday, December 19, 2024), Bitcoin also tested levels below the
psychological support of $100,000. However, at the time of writing, it has
modestly rebounded and is trading at $101,600 on Binance.
Bitcoin price defends the $100K mark. Source: TradingView
The
cryptocurrency’s trajectory has been significantly influenced by political
developments, with a 50% surge following the November presidential election.
The president-elect’s pro-crypto stance and proposals for a national Bitcoin
reserve have fundamentally altered market sentiment, though regulatory
uncertainties persist.
Federal Reserve Chair Jerome Powell says the Fed is “not allowed to own Bitcoin”
They weren’t allowed to own Corporate Bonds before Covid either.
Rules change… 😉 pic.twitter.com/3UBBUuKtdF
— Bitcoin Archive (@BTC_Archive) December 18, 2024
$661 Million in Longs
Vanished
Over the
past 24 hours, more than $661 million in leveraged long positions have been
liquidated in the cryptocurrency market, according to Coinglass data. The
majority of these liquidations were tied to Bitcoin ($110 million) and Ethereum
($109 million).
Bitcoin’s
decline fueled a…
