Bitcoin faced turbulence after U.S. Federal Reserve Chair Jerome Powell’s recent comments, dropping below the critical $100,000 mark. His statements during the Federal Open Market Committee (FOMC) meeting on December 18th have stirred uncertainty across the cryptocurrency and equity markets, triggering sell-offs and cautious investor sentiment.
Powell’s Stance on Bitcoin Dampens Market Hopes
During the FOMC press conference, Powell reiterated the Federal Reserve’s inability to hold Bitcoin and dismissed the possibility of seeking legal changes to allow this. Addressing questions about a U.S. government Bitcoin reserve, Powell stated:
“We’re not looking for a law change.”
These remarks dashed speculations of potential Bitcoin adoption by U.S. financial authorities, contributing to Bitcoin’s decline. At the time of writing, Bitcoin is trading at $101,292, down 2.01% over the past 24 hours.
FOMC Projections Add to Market Jitters
The broader market was further shaken by Powell’s announcement that the Fed’s 2025 rate cut projections had been halved from four to two, signaling a cautious monetary policy outlook. This shift led to market-wide sell-offs, with Bitcoin breaking below the $100K psychological threshold.
Altcoins bore the brunt of the bearish sentiment, with Ethereum falling 6%, XRP down 10%, and Avalanche, Chainlink, and Litecoin each losing 16% over the past 24 hours.
Whale Activity and Market Dynamics
Despite the bearish sentiment, whale activity in the Bitcoin market has remained robust. Data from IntoTheBlock reveals that large transactions, exceeding $100K, hit a seven-day high of 926.53K BTC on December 16th, indicating sustained institutional interest.
Coinglass data showed a 39.05% surge in Bitcoin trading volumes, reaching $150.01 billion. Exchange netflows also revealed $43.3 million in net outflows on December 19th, as traders moved Bitcoin into cold storage, signaling confidence in its long-term value.
Technical Analysis: Critical Levels to Watch
Crypto analyst Ali highlighted that Bitcoin has broken out of a head-and-shoulders pattern, projecting a potential bearish target of $99,000. However, Ali emphasized the importance of surpassing the $105,400 resistance level to invalidate the bearish outlook.
“Bitcoin must break $105,400 to confirm recovery trends,” Ali stated.
Market Sentiment and Outlook
The overall crypto market cap fell by 5% to $3.44 trillion, while trading volumes rose by 40%, reflecting heightened market activity. Despite short-term uncertainty, the consistent whale activity and reduced sell pressure suggest that many investors remain optimistic about Bitcoin’s long-term trajectory.
Conclusion
Powell’s cautious tone and the Fed’s revised rate cut projections have added to market volatility, keeping Bitcoin below $100,000. However, the continued institutional interest, increased trading activity, and reduced sell pressure indicate that Bitcoin may recover in the coming weeks. Investors are closely watching the $105,400 resistance level for signs of a potential rebound.
Disclaimer:This content is for informational purposes only and should not be considered financial advice. Always conduct thorough research before making investment decisions.