Bitcoin has dropped 15% from its recent all-time high of $108,000, causing concern among analysts regarding the future of the bull market. Following Federal Reserve Chairman Jerome Powell’s announcement of a more restrictive monetary policy, Bitcoin struggled to maintain support at $92,000. With considerable liquidations occurring in the derivatives market, the cryptocurrency’s next move remains uncertain as it fluctuates around $95,000.

In recent days, Bitcoin has faced a significant downturn, witnessing a roughly 15% decline from its peak of $108,000. This drop marks a notable shift in the cryptocurrency’s momentum after several months of steady growth. Analysts are now questioning whether Bitcoin can recover from this setback or if it will continue to decline, with fears that it may break through the crucial support level of $90,000.

The price has endured a substantial blow following the announcement from Federal Reserve Chairman Jerome Powell, who indicated a shift towards a more restrictive monetary policy framework. In particular, Powell revealed that the planned federal rate cuts may be reduced from four to just two by 2025, triggering a ripple effect that has spooked various financial markets, Bitcoin included. Following a peak in value shortly after Bitcoin reached an all-time high, it now finds itself precariously testing the support level at $92,000 before climbing slightly to $95,000.

The most recent price movements were characterized by liquidations in speculative trading, where approximately $400 million in long positions were obliterated between December 18 and 20, a stark contrast to the nearly $500 million lost in a single day earlier in the month. Moreover, the lack of significant volatility in the funding rates, which held steady between 0.01% and 0.007%, suggests that the price drop was not driven by excessive leverage.

Despite the turmoil, Bitcoin remains in a state of stasis, hovering just above the 50-day exponential moving average, which could act as a springboard for a potential recovery. For Bitcoin to spark positive sentiment among investors, a rally back to $100,000 may need to occur. However, a firm break above $103,000 would further instill confidence and attract fresh capital.

Conversely, failure to maintain support near $90,000 could signal a more pronounced decline, with targets dropping toward $80,000 if that level is breached. Such a scenario would likely pose a serious threat to the ongoing bull market. Nevertheless, the broader macro trend continues to point upwards, leaving open the possibility for Bitcoin to regain its footing and rally before year-end.

Bitcoin is often subject to significant volatility influenced by market factors and external economic conditions. Recent shifts in monetary policy articulated by Federal Reserve Chairman Jerome Powell have contributed to uncertainty in financial markets, including cryptocurrencies. Historically, Bitcoin has demonstrated patterns of rapid ascent followed by corrections, as seen after the recent price surge of over 80% over the past few months. Investors and traders keep a close watch on key price levels to gauge future movements, maintaining optimism while navigating the current turbulence.

The recent price correction of Bitcoin represents a critical juncture in its ongoing market narrative. As it attempts to hold above important support levels, the cryptocurrency’s future hangs in the balance, swayed by macroeconomic signals and speculative pressures. With the potential for recovery still present, stakeholders remain vigilant for both bullish and bearish trends that can signal either a rebound or further decline.

Original Source: en.cryptonomist.ch

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