Bitcoin’s (BTC) price dipped below $100,000 after U.S. Federal Reserve Chair Jerome Powell dismissed the idea of a national Bitcoin reserve.
Bitcoin was trading at $100,744 at press time, reflecting a 2.95% decline in the past 24 hours, with a 7-day low of $98,839.87. Powell’s comments come amid growing calls for Bitcoin adoption, with several U.S. states proposing state-backed Bitcoin reserves.
At a news conference, Powell clarified that the central bank is “not allowed to hold Bitcoin” and has no intention of seeking legislative changes to enable it. This statement dampened market enthusiasm that had previously been buoyed by discussions around potential government-led Bitcoin initiatives.
Key Support Levels Challenged as Bitcoin Faces Increased Volatility
Bitcoin has been consolidating around the $100,000 level, but the loss of support at this critical psychological price has raised concerns. Crypto analyst Rekt Capital noted,
“$101k has been turned into support intra-day. And now, $100k has been lost as support… BTC has now dropped into $98,500.”
According to the analyst, a failure to reclaim $100,000 as support could lead to further downside pressure.
Source: X
Technical indicators like the Bollinger Bands show that Bitcoin is trading near the lower range, indicating heightened volatility. With support at $98,500, traders are watching for a bounce, but resistance at $100,000 may pose challenges if it flips into a sell zone.
Market Reaction Following FOMC Comments
Powell’s projection for fewer interest rate cuts by 2025 also affected broader markets, creating uncertainty among crypto and equity traders. Data from Santiment shows that several altcoins experienced steep declines in the past 24 hours, including Avalanche, Chainlink, Litecoin, and Pepe, which fell by as much as 17%.
These declines, coupled with Bitcoin’s dip, have sparked discussions about whether this is an overreaction by the market.
Source: Santiment
The recent Federal Open Market Committee (FOMC) decision to cut interest rates provided short-term relief but was overshadowed by Powell’s long-term projections. Analysts are now debating whether Bitcoin and other cryptocurrencies will stabilize or face extended corrections in the coming weeks.
Whales and Retail Traders Monitor $100K Level
The $100,000 level remains critical for Bitcoin, as it could either serve as a launchpad for recovery or a hurdle for further declines. Whale activity has been prominent, with major market players reportedly accumulating Bitcoin during dips. On the retail side, investors are closely watching for signs of stabilization before entering the market.
Historically, Bitcoin has experienced pullbacks of 25%-30%, similar to the corrections observed earlier this year between March and August. This historical precedent has traders remaining cautious, with many emphasizing the importance of $99,800 as a key support level to prevent deeper losses.
FAQs:
Why did Bitcoin drop below $100K?
Bitcoin dipped after Jerome Powell dismissed the idea of a national Bitcoin reserve.
What are analysts saying about Bitcoin’s support levels?
Analysts believe $99,800 is a key support, with resistance near $100,000 creating potential sell-side pressure.
How are altcoins reacting to the Bitcoin dip?
Altcoins like Avalanche and Chainlink saw declines of up to 17%, raising concerns of broader corrections.
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