Why is Bitcoin Crashing? How Low Could the Price Go?
Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, has attracted significant attention from the crypto community after its price continued to fall. However, there are multiple speculations about this price drop. Some believe this could be related to defunct cryptocurrency exchange Mt. Gox, while others attribute it to Federal Reserve Chairman Jerome Powell’s anti-crypto stance.
Reasons behind Bitcoin price plunge
According to reports, on December 19, 2024, Mt. Gox distributed $100 million worth of Bitcoin. The report states that the company moved a large amount of BTC to three different wallet addresses, with each address receiving $30.18 million worth of Bitcoin.
Mt. Gox Payment
A potential reason for the selling pressure on Mt. Gox is the distribution of billions of dollars worth of BTC to creditors, an event expected to occur in the coming days. However, the exact timeline remains unknown. If this distribution occurs, then the recent price drops are likely to be relatively small and we could see a significant decline in Bitcoin prices.
Jerome Powell’s stance adds pressure
Another potential reason for the recent price decline is that the Chairman of the Federal Reserve Jerome Powell’s Anti-crypto stance during rate cut announcement. Powell made a bold statement during the interview that attracted a lot of attention from the cryptocurrency community.
“We are not allowed to own Bitcoin and have no intention of changing the law,” he said. Prices across the cryptocurrency market have been falling since this announcement.
Bitcoin (BTC) Technical Analysis and Upcoming Levels
Apart from these two speculations, another potential reason behind the significant price decline is the breakdown of key support levels. According to technical analysis by CoinPedia, BTC has fallen below rising support that has been held since early November 2024.
Following this crash, the price of BTC fell by 6.5% but found support at the $92,500 level and is now starting to rise. Based on recent price action, if BTC fails to maintain this level, a drop to $85,500 is very likely. However, if the support levels hold, the upward momentum is likely to continue.
BTC has plummeted more than 14% in the past three days, with the price falling from $106,600 to $92,600. This sharp decline caused BTC to break above its key ascending support level, which has been intact since early November 2024.
