Bitcoin Price Drops After Fed’s Caution, But Recovery Likely
Bitcoin Price– Bitcoin (BTC) has experienced significant volatility, recently bouncing back to around $102,000 as of the Wall Street open on December 19. This price movement followed a brief downturn triggered by a macroeconomic scare. The Federal Reserve’s actions and commentary have been key factors influencing Bitcoin’s price action. Here’s an in-depth look at the latest developments in Bitcoin’s market, the effects of Federal Reserve policy, and what traders are saying about its future.
Bitcoin Faces Downturn After Fed Announcement
Bitcoin’s price took a hit during a broader sell-off in crypto and risk assets after the US Federal Reserve’s latest decision. On December 18, BTC/USD dropped to lows of $98,695 on Bitstamp, as the market reacted to news from Fed Chair Jerome Powell. Powell’s comments about the Fed’s cautious stance on future interest rate cuts were seen as a drag on risk assets, including Bitcoin.
In a statement following a 0.25% rate cut, Powell mentioned, “We can therefore be more cautious as we consider further adjustments to our policy rate.” This cautious tone sent shockwaves through the market, contributing to a 3% drop in major indices like the S&P 500 and Nasdaq 100. As a result, Bitcoin struggled to maintain its upward momentum, temporarily stalling the bull market that had been building up in recent weeks.
Bitcoin Price Recovers: Trader Sentiment Remains Cautious
Despite the initial setback, Bitcoin managed to recover slightly, showing a 2% gain from the daily opening price. According to data from Cointelegraph Markets Pro and TradingView, BTC was able to push back toward $102,000 after briefly dipping below the $100,000 mark.
Skew, a popular crypto trader, remained cautiously optimistic despite the volatility. In a recent X post, he wrote, “So far, no trend invalidation even with the sweep of last week’s low & market demand. Would like to see price remaining strong above VAH here & sustained passive demand under price for a recovery / higher.”
Skew pointed out the importance of holding the Value Area High (VAH) above $101,500, suggesting that Bitcoin could continue its recovery if it can maintain this price level.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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