Following the hawkish stance of Federal Reserve Chairman Jerome Powell, who forecasted a more cautious approach to interest rate cuts next year, the cryptocurrency market continued to plummet today (20th), extending the market panic from the previous day, leading to a significant decline in investor confidence, with all major cryptocurrencies falling.
After failing to stabilize above the $100,000 mark in the early hours of today, Bitcoin quickly fell to around $97,000. Although it briefly rebounded to $98,000, it still succumbed to selling pressure, dipping below $96,000 at one point.
As of 10:30 AM Taipei time, Bitcoin is priced at $96,626, down 2.2% in the past 24 hours, while Ether has fallen 4.3%, losing the $3,500 mark.
According to CoinGlass data, within 24 hours after the Fed's latest interest rate decision was announced, the cryptocurrency derivatives market faced approximately $1.2 billion in liquidations, of which over $1 billion came from long positions, indicating that the market's earlier optimistic bets on price increases were almost entirely wiped out.
Is the health correction still a hidden storm?
Joel Kruger, market strategist at LMAX Group, stated that Bitcoin was already in an 'overheated state' after breaking through the $100,000 barrier, and the pullback pressure had been accumulating for some time. The Fed's hawkish stance became the 'trigger point,' prompting the market to correct its previous excessive optimism.
Azeem Khan, co-founder of Layer2 network Morph, pointed out that although Bitcoin's price has dropped in the short term, this correction appears healthy when viewed in the context of its annual growth.
He added that as the year comes to an end, some investors may sell off certain assets to adjust their tax burdens, a behavior that is not uncommon historically and may also be one of the reasons for the recent pressure on Bitcoin.
Is there still room for Bitcoin to rebound in the future?
Despite the current market sentiment being relatively low, Paul Veradittakit, managing partner at Pantera Capital, believes that Bitcoin's long-term fundamentals remain strong. Since the U.S. election, Bitcoin has accumulated a rise of over 45%, mainly benefiting from Trump's return to the White House and his commitment to promote cryptocurrency-friendly policies. Trump also supports establishing a 'national Bitcoin reserve,' which has injected strong confidence into the market.
However, investors still need to be wary of the risks posed by excessive optimism. Zann Kwan, Chief Investment Officer at Revo Digital Family Office, warned that Bitcoin could drop to the $90,000 range in the short term, but such a pullback might be temporary, as long as the market remains flexible in its response, long-term upward trends are still expected.
"Bitcoin plummets and briefly falls below $96,000! Is there still hope for the future? Analysts interpret it this way" - this article was originally published on (Blockke).
