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Cryptocurrency markets have been experiencing volatile days due to spot ETF discussions and the halving process expected in April, causing significant movement in Bitcoin (BTC). However, Bitcoin has seen a notable decline in the last 24 hours.
Bitcoin and the Federal Reserve’s Decisions
The price of Bitcoin fell by approximately 1.8%, dropping to $41,860. This recent decline may be a continuation of the correction phase that started a few days ago, which was trying to overcome the resistance level at $43,850. The Federal Reserve’s stance on interest rates has laid important groundwork for Bitcoin. On the last day of January, the Fed decided to keep interest rates between 5.25% and 5.5%. This decision has broader implications, especially for risky assets like Bitcoin. The absence of an interest rate cut suggests that borrowing costs will remain high, potentially deterring investments in riskier assets, including cryptocurrencies.
Additionally, the situation with Grayscale Bitcoin Trust (GBTC) and the outflow of Bitcoin from the defunct Mt. Gox exchange were added to the mix. Outflows from GBTC, combined with the U.S. government’s plans to auction off approximately $120 million worth of Bitcoin, have introduced new uncertainty into the market. A noticeable change occurred over the last few months as miners began to unload their Bitcoins.
Price Movements in Bitcoin
This trend highlights the negative change in the Bitcoin supply held in miner addresses since November 11. The sales by miners could be due to various factors, including operational factors. Costs and speculative expectations have created additional downward pressure on the Bitcoin price.
Bitcoin’s recent price movements can be seen as a struggle against the backdrop of resistance levels and trading volume indicators. The decline began at a resistance junction marked by a descending trend line and a horizontal resistance level around $44,000. However, recent trading volumes have not shown a significant increase, indicating a lack of strong conviction behind the price movement. This leaves room for speculation that Bitcoin could find its footing and potentially recover towards the $44,000 level, provided it does not fall below key support levels soon.
