Bitcoin Experiences Significant Drop Following Strong U.S. Economic Data
Bitcoin dropped over 5% to $96,200 after strong U.S. economic data suggested fewer Fed rate cuts in 2025. The services sector showed growth, impacting market expectations, with Bitcoin’s support now at $94,500 and resistance at $98,600. Other major cryptocurrencies also fell, contributing to a 6.15% decrease in global market cap.
Bitcoin experienced a notable decline of over 5%, falling to approximately $96,200 following the release of robust U.S. economic data. This data indicated an acceleration in the services sector and an increase in job openings, suggesting a stronger than anticipated economy. Consequently, market expectations have shifted, now estimating only one rate cut by the Federal Reserve in 2025, down from the previously anticipated two cuts. The Fed’s earlier outlook of two rate cuts this year has also been halved.
The dynamic nature of the cryptocurrency market highlights the importance of staying informed for investors. Edul Patel, the CEO of Mudrex, noted that Bitcoin’s support is currently at $94,500 with immediate resistance observed at $98,600. Avinash Shekhar, Co-Founder and CEO of Pi42, advises investors to exercise caution given the fluctuating market environment.
Further, significant declines were noted in other major cryptocurrencies, including Ethereum, which fell by 9%, and Dogecoin, which dropped by 10.7%. The global cryptocurrency market cap similarly saw a decrease of 6.15%, resulting in a total of $3.36 trillion. Additionally, Bitcoin’s market cap fell to $1.907 trillion, with its dominance currently at 56.8%.
From a technical perspective, Sathvik Vishwanath, Co-Founder and CEO of Unocoin, posits that there is an expectation for Bitcoin to trend towards $95,195, with further declines possible if support levels are breached. Should Bitcoin manage to surpass $99,785, there may be a potential reversal, allowing for a return to a bullish trend. The anticipated price fluctuation for Bitcoin today lies within the range of $93,500 as support and $98,500 as resistance.
The recent shift in Bitcoin’s value is largely attributed to newly released economic indicators from the United States. These indicators reflect significant growth in the services sector and a rise in job openings, which altogether suggest a more resilient economy. Such economic strength can impact monetary policy decisions, particularly those made by the Federal Reserve concerning interest rates, thus influencing the cryptocurrency market.
In summary, Bitcoin’s recent decline can be traced back to stronger-than-expected economic data from the U.S., leading to altered market expectations regarding Federal Reserve interest rate cuts. This has implications not only for Bitcoin’s price trajectory but also for the broader cryptocurrency market, which has seen widespread declines. Investors are advised to remain vigilant and cautious in these volatile conditions as market sentiments can change swiftly.
Original Source: m.economictimes.com
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