Fed Chair made hawkish remarks, and Bitcoin fell below $100,000.
A statement from Fed Chair Powell doused cold water on Bitcoin, which had been surging recently.
According to (CoinDesk) reports, the U.S. Federal Reserve FOMC announced a rate cut of 25 basis points last night, lowering the benchmark rate to the range of 4.25%-4.50%, marking the third rate cut of the year, in line with market expectations.
However, Powell made hawkish remarks at the post-meeting press conference, expecting to slow the pace of further interest rate cuts in response to higher inflation data over the past few months and elevated inflation expectations for next year.
The Federal Reserve's latest quarterly economic forecast 'dot plot' shows that Fed officials expect the federal funds rate to drop to 3.9% by the end of 2025, higher than the 3.4% predicted in September, suggesting that monetary policy in 2025 will not be as loose as previously expected.
Additionally, Fed officials have raised their inflation expectations for next year's personal consumption expenditures (PCE) and core PCE from the September forecast of 2.1% and 2.2% to 2.5%.
Following the news, both the U.S. stock and cryptocurrency markets suffered significant declines. As of this morning (12/19), Bitcoin has fallen below the $100,000 mark, with a daily drop of 5.46%, and the perpetual contract market has also seen a large number of liquidations.
CoinGlass data shows that in the past 24 hours, a total of 295,605 people have been liquidated across the network, with a total liquidation amount of $850 million, of which long positions (buy orders) accounted for $750 million, and short positions (sell orders) accounted for $103 million.
Source: CoinGlass 12/19 Cryptocurrency perpetual contract market liquidation data.
Bitcoin plummeted, where can one buy the dip?
Renowned analyst skew pointed out on X (formerly Twitter) that from the 4-hour trend, if bulls want to maintain strength, they need to exert effort around $100,000 and let the price close above $101,400. Otherwise, Bitcoin may retest the important liquidity area around $98,000.
From the technical chart shared by skew, if Bitcoin cannot hold the support at $98,000, it may further test support levels around $95,000 and $92,500. These price levels are important technical support areas for Bitcoin, potentially presenting buying opportunities.
Source: skew Analyst skew shared Bitcoin technical analysis chart.
Bitcoin profit-taking indicator dropped from $10 billion to $3 billion.
Although Bitcoin's market has been highly volatile recently, some analysts remain optimistic about the future market.
According to (Cointelegraph) reports, CryptoQuant analyst Percival pointed out that although Bitcoin has risen 12% in the past three weeks, the net realized profits of long-term holders have dropped significantly from $10 billion on November 25 to $3 billion on December 14.
Percival stated that this indicates long-term holders have realized most of their profits at this stage, and the market is ready for further increases.
However, independent trader Yonsei Dent cautioned investors to pay attention to changes in Coinbase premiums. This indicator has been declining since early December, diverging from Bitcoin's price trend, indicating weakening demand from U.S. investors and suggesting a potential softening of mid-term upward momentum.
Source: CryptoQuant Changes in net realized profits for long-term Bitcoin holders.
Analysts remain optimistic about the future market, expecting a breakthrough in the first quarter of 2025.
Another cryptocurrency trader, Daan Crypto, pointed out that Bitcoin's current trend is similar to last year. He expects the market to continue to maintain a consolidation phase until the end of 2024, with a real breakout occurring in the first quarter of 2025.
However, Bitwise's Head of Research in Europe, Andre Dragosch, warned that the current strength of the dollar index may be one of the biggest risks facing Bitcoin.
He explained that the appreciation of the dollar is usually associated with a contraction in global money supply, which is generally unfavorable for Bitcoin and other crypto assets. However, he also pointed out that on-chain data shows Bitcoin remains very strong, especially with exchange balances continuing to decline, supporting the hypothesis of Bitcoin supply shortage.
【Disclaimer】The market has risks, and investment should be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views, or conclusions in this article are suitable for their specific situation. Investing based on this is at one's own risk.
‘The Fed is hawkish! Bitcoin once fell below $100,000, with 300,000 liquidations, where can one buy the dip?’ This article was first published on 'Crypto City'.
