Bitcoin (BTC) dropped to $66,250, marking the lowest price in the last 24 hours. Despite a $400 jump, it remains in a risky zone. What drove investors to sell over $3,000 in 24 hours? Why did BTC fall by 5%?
Why is Bitcoin Falling?
For days, we mentioned that Wednesday’s Fed announcements could be a key point for a break. Investors were hopeful with inflation data an hour before the US markets opened, but it didn’t go as expected. Half an hour before Powell’s statements, the interest rate decision and members’ 3-year rate forecasts were released. The dot plot showed a median view of a 25bp cut for 2024.
At the beginning of the year, the median view was a 75bp cut, while the market expected a 150bp cut. Powell emphasized that these forecasts were not revised despite the positive June 12 (May data) inflation report.
The market is now trying to digest the possibility of only one cut this year. Although these forecasts are not mandatory, the drop from 75bp to 25bp indicates a problem, and the market received this message.
BTC at $66,270 is a significant support area tested multiple times. If it closes below this level, sales could deepen to $64,700 and $60,200 supports. This indicates that the altcoin sales since Friday are minor compared to what might happen.
