Bitcoin drops below $100,000

Bitcoin gained strength briefly on Thursday, almost touching $100,000, but plunged to the $95,000 mark later in the day. If the BTC price declines, support can be found at $92,200, while resistance may be encountered at the psychological level of $110,000. 

Ethereum price dipped on Thursday, dropping from $3,470 to $3,340. If Ethereum's price declines, it may encounter support near $3,210, while if it increases, resistance may be encountered near $3,540.

Bitcoin price registered a new all-time high of $108,200 last week after US President-elect Donald Trump confirmed plans to build a Bitcoin strategic reserve. Donald Trump has openly declared his support of crypto markets, announcing that he will make the US ‘the crypto capital of the planet’. Growing expectations that the new government will adopt a pro-crypto regulatory and fiscal policy have been boosting crypto markets, especially since Donald Trump announced plans to accumulate a national crypto stockpile. Trump reaffirmed his pre-election commitment to build a Bitcoin strategic reserve, boosting crypto markets. 

Cryptocurrency prices are also affected by central banks’ interest rates. The US Federal Reserve cut interest rates by 25 basis points last week to a target range of 4.25% to 4.50%. However, a 25-basis point rate cut had been fully priced in, and market participants focused mostly on the Fed’s forward guidance.

Indications that the Fed will follow a more hawkish approach than previously anticipated put pressure on crypto markets last week. In his press conference after the policy meeting, Fed Chair Jerome Powell delivered a hawkish message, emphasizing the need to be cautious about further rate cuts. In addition, the Fed’s latest dot plot indicated that only two rate cuts will take place in 2025, down from four projected in September.

Geopolitical concerns are promoting a risk aversion sentiment, however, lowering the appeal of high-risk assets such as cryptocurrencies. The situation between Russia and Ukraine remains critical, with Russia threatening to use nuclear missions against Ukraine. In addition, tensions between Israel and Lebanon have cooled after the ceasefire deal, but hostilities between Israel and Hamas continue in the Gaza area. Meanwhile, the civil war in Syria has been rekindled, further destabilizing the region and lowering risk sentiment.

BTC/USD 1h Chart

ETH/USD 1h Chart

TRADE CRYPTO

The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

Written by:
Myrsini Giannouli

Share the article: