The Bitcoin ($BTC) price is continuing to decline at a rate of knots. Down a combined 8% for Wednesday and Thursday, the price is still falling on Friday, currently at around $95,000. How much further will this plunge go?
Powell successfully talks the market down
Who would have thought that a Fed rate cut of 25 basis points would have resulted in so much carnage across markets. Once Federal Reserve Chairman Jerome Powell took the stage at the end of the FOMC meeting on Wednesday and began to ‘talk the market down’, by saying that there would only likely be two interest rate adjustments in the whole of 2025, the markets started to descend.
What Powell was doing was probably absolutely to be expected. With the Fed in between a rock and a hard place, any more promise of further rate cuts could have fired markets to the upside, with the very possible consequence of also igniting inflation.
On top of this, most of the Fed members are even predicting rate rises, as per the Fed’s dot plot system. The fact that Federal Reserve predictions are almost never correct does not appear to have been considered by the market in this case.
Spot Bitcoin ETFs see big outflow
In response to the current malaise for Bitcoin, the U.S. Spot Bitcoin ETFs sold heavily on Thursday with a record 6.71K BTC outflow. This brings to an end a record straight 15 trading days of net inflows.
Measured move to $89,400
Source: TradingView
The 4-hour chart above shows a definitive break of the ascending channel for $BTC. These patterns do usually break to the downside, so there is no surprise here. The price has reached the deepest Fibonacci level of 0.786 at a price of $95,000. If the price continues its descent, the measured move for the channel is shown on the chart at $89,400.
If this plays out, the problem would be that $BTC makes a lower low. This would likely signal an end to the current uptrend, and then a much bigger reversal down to $73,000 or lower could take place.
Nosedive back to $73,000 is a possibility
Source: TradingView
The daily chart shows just how precipitous the next drop could be for $BTC. If the price does not stop at the measured move out of the ascending channel, the price could nosedive all the way down to $73,000. At least at this level there is plenty of market structure to hold the price from dropping further.
At the bottom of the chart is the Stochastic RSI which signals momentum. As can be seen, the indicator lines are reaching the bottom. This is also the case for all the short-term indicators below the daily. Therefore, a move back to the upside should be forthcoming.
However, it will remain to be seen whether the next upside move will continue the uptrend, or whether it will confirm the downtrend. Bitcoin is at a very pivotal moment.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.