Key Reasons Why Bitcoin Price Is Down?
After reaching a Hits new high of $108,000Bitcoin prices have fallen sharply, leaving investors questioning the reasons behind the sudden drop. While earlier gains brought excitement to the market, several factors are now causing the downtrend. Meanwhile, if Bitcoin fails to break above the resistance, it could fall further to $95,000.
Fed interest rate decision
One of the main reasons for Bitcoin’s decline is the upcoming interest rate decision from the Federal Reserve. However, Coinpedia News reports that there is a There is a 96% chance The Fed is expected to cut interest rates by 25 basis points, but concerns remain over how it plans to deal with future inflation.
With inflation rising to 2.8% in November, Federal Reserve Chairman Jerome Powell’s comments on the outlook for interest rates in 2025 are being closely watched. If the Fed cuts interest rates less than expected in 2025, it could put huge pressure on the market.
Trader cashes in profits
Another key factor is the wave of selling by short-term Bitcoin holders. Many traders who recently purchased Bitcoin are now selling to secure profits following the massive rally. This type of sell-off is common after prices reach new highs.
However, long-term holders who bought when Bitcoin was trading between $90,000 and $100,000 have mostly remained inactive and may be waiting for more stable conditions before making a move.
History display adjustment is normal
Bitcoin’s past price cycles have shown that corrections are a normal part of its growth. During previous all-time highs, Bitcoin regularly saw retracements of up to 34%. These short-term declines can wipe out weeks of gains but are considered a natural part of market behavior.
Analysts believe that this correction could see Bitcoin temporarily drop below $100,000 before stabilizing again.
Bitcoin will drop $95,000
As of now, Bitcoin is trading at around $104k accounts for 2.93% It has declined over the past 24 hours. However, for Bitcoin to maintain its upward momentum, it needs to turn this new price peak into a solid support level. If successful, the price could cross the much-anticipated $110,000 mark.
However, if Bitcoin fails to break and hold this resistance, the price may decline and Bitcoin may fall back to the next key support level at $95,651.
