Bitcoin (BTC) is the largest cryptocurrency by market capitalization, and it has garnered significant attention from the cryptocurrency community following a sustained drop in price. However, there are several speculations regarding this price drop. Some believe it may be related to the defunct cryptocurrency exchange Mt. Gox, while others attribute it to Federal Reserve Chairman Jerome Powell's anti-cryptocurrency stance.
Reasons Behind the Bitcoin Price Crash
On December 19, 2024, it was reported that Mt. Gox distributed Bitcoin worth $100 million. Reports indicate that the company transferred this substantial BTC to three different wallet addresses, each receiving Bitcoin worth $30.18 million.
Mt. Gox Compensation
The potential reason for the selling pressure caused by Mt. Gox is the distribution of billions of dollars worth of Bitcoin to creditors, which is expected to occur in the coming days. However, the exact timeline remains unknown. If this distribution happens, the recent price drop may be relatively mitigated, and we could see a significant decline in Bitcoin's price.
Jerome Powell's stance increases pressure
Another potential reason for the recent price decline is Federal Reserve Chairman Jerome Powell's anti-cryptocurrency stance during the announcement of interest rate cuts. Powell made bold statements in an interview that garnered significant attention from the cryptocurrency community.
He stated, 'We are not allowed to hold Bitcoin and do not wish to change the law.' After this statement was made, the prices across the entire cryptocurrency market have been declining.
Bitcoin (BTC) Technical Analysis and Upcoming Levels
In addition to these two speculations, another potential reason for the significant price drop is the breach of a key support level. According to CoinPedia's technical analysis, BTC has fallen below the upward support level that had been maintained since early November 2024.
Following this crash, BTC's price dropped by 6.5%, but found support at the $92,500 level and has begun to rise. Based on recent price trends, if BTC fails to hold this level, it could very likely drop to $85,500. However, if the support level remains unchanged, the upward momentum may continue.
In the past three days, BTC has plummeted over 14%, dropping from $106,600 to $92,600. This significant drop has caused BTC to fall below a key upward support level that had been maintained since early November 2024.