The price of BTC unexpectedly plummeted at a critical moment when the Federal Reserve is about to make a decision on interest rate cuts, falling below the $104,000 mark.
Executives at Bank of America stated that a rate cut by the Federal Reserve is almost a done deal, but there is still one important issue that remains unresolved—inflation remains high. This has left the market confused about the Federal Reserve's future policy direction, with many speculating on how Fed Chairman Powell might adjust monetary policy in 2025, which directly impacts market trends. Especially in the cryptocurrency market, which relies on changes in commodity prices and the macroeconomic environment, any sudden news can trigger significant price fluctuations.
In the current market uncertainty, renowned investor Arthur Hayes has also issued a warning. He predicts that the market will enter a correction phase and specifically mentioned that President Trump's inauguration day could become a trigger for a significant drop in BTC. Hayes indicated that his investment fund plans to gradually reduce its positions during this period to seize potential pullback opportunities. This statement has intensified the tense atmosphere in the market, especially with a noticeable decrease in trading volume. Over the past 24 hours, the liquidation amount of BTC reached $71 million, of which $48 million was from long position liquidations, indicating extreme market sentiment.
The crash of BTC once again demonstrates the high level of uncertainty in the cryptocurrency market. Whether it is the Federal Reserve's monetary policy or the short-term capital flow in the market, both will have a significant impact on BTC's price. The current short-term adjustment in the market may be a signal that investors' expectations for future trends have changed. However, considering BTC's long-term potential and the capital strength in the market, it is still possible for BTC to experience a new rise after the adjustment.
Stay cautious and avoid excessive excitement. Although the market is currently in a volatile state, for forward-thinking investors, this is the best time to observe market opportunities and adjust investment strategies. At the same time, the crash of BTC also reminds us that market surges and drops can happen overnight.
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