Donald Trump

Jerome Powell

Bitcoin

<p>The world’s largest cryptocurrency, <a target="_blank" href="https://bitcoin.org/" rel="noreferrer noopener">Bitcoin</a> has shocked the crypto world after it dropped by 12.74 per cent over the past three days. The coin, which at the time of this report <a target="_blank" href="https://www.coindesk.com/price/bitcoin" rel="noreferrer noopener">trades at a $93,950</a> price level, has lost about $13,000 in value within 36 hours.</p> 
<p>Recall that Bitcoin over the last two months has seen its price skyrocket with a gain of 192 per cent this year following <a target="_blank" href="https://technext24.com/2024/12/16/bitcoin-hits-new-record-high-106000/#google_vignette" rel="noreferrer noopener">its record high</a> of $106,000 on Monday after briefly topping $108,000.</p> 
<figure class="wp-block-image size-full is-resized">
 <img loading="lazy" decoding="async" width="691" height="1189" src="https://technext24.com/wp-content/uploads/2024/12/ScreenCaptures_2024-12-20-140512.png" alt="Bitcoin chart" class="wp-image-242279" style="width: 100%;height:auto">
</figure> 
<p>Bitcoin’s achievement has been attributed to an effect following President-elect&nbsp;Donald Trump’s&nbsp;plans to create a U.S.&nbsp;bitcoin strategic reserve&nbsp;similar to its strategic oil reserve which further raised the enthusiasm of&nbsp;crypto&nbsp;bulls.</p> 
<p>For a month now since Donald Trump’s victory in the US election, Bitcoin and crypto have skyrocketed into the spotlight. Also, crypto investors positively anticipate the incoming Trump administration which promises to usher in a friendlier regulatory environment, boosting sentiment around the alternate currency.&nbsp;</p> 
<p>Following its sudden fall, the entire crypto market in the last 24 hours has seen 334,000 traders liquidated and $1.10 billion lost in funds. This downturn signalled that crypto traders are taking heavy losses. The biggest liquidation happened for the ETH/USDT pair with a value of $15.80 million. $929.16 million was lost to long trades as the market took a huge bite.</p> 
<p>Amid the negative line, paper-hand traders have been rushing to sell their assets while the experienced ones are taking advantage of the decline to increase their portfolios.</p> 
<h4 id="the-cause-of-bitcoins-dip" class="wp-block-heading">The cause of Bitcoin’s dip</h4> 
<p>As the largest crypto continues to fall over the past thirty-six hours, let’s take a look at the possible indicators responsible for its price dip.</p> 
<h5 id="el-salvadors-policy" class="wp-block-heading">El Salvador’s policy&nbsp;</h5> 
<p>In recent reports, El Salvador, the first country to make Bitcoin legal tender, has faced huge opposition from traditional financial institutions.&nbsp;</p> 
<p>According to Coinpedia, a major cryptocurrency analysis platform, the International Monetary Fund (IMF) has warned the country about its Bitcoin policy. The economic agency urged El Salvador to reduce public sector exposure to crypto. However, the country stood firm while refusing to change its stance.</p> 
<p>In a new development, El Salvador has reached an&nbsp;agreement with the IMF&nbsp;for a $1.4 billion loan to support its economy which comes with one condition. The agency required the country to make changes to its Bitcoin policy. El Salvador accepted the terms which many crypto experts believed the deal must have played a big part in Bitcoin’s recent price drop.</p> 
<h5 id="united-states-interest-rate-reduction" class="wp-block-heading">United States interest rate reduction</h5> 
<p>Another major player in Bitcoin’s sharp decline is the U.S. Federal Reserve’s decision to cut interest rates by 25 basis points for the third time in 2024. The decision seems to have made buyers take caution on their moves to wait and see the effect of the development.&nbsp;</p> 
<figure class="wp-block-image size-full is-resized">
 <img loading="lazy" decoding="async" width="757" height="356" src="https://technext24.com/wp-content/uploads/2021/02/Bitcoin-prison-760x400-1.jpg" alt="Social Media Roundup: Nigerians Kick Against CBN Clampdown on Cryptos" class="wp-image-103228" style="width: 100%;height:auto" srcset="https://technext24.com/wp-content/uploads/2021/02/Bitcoin-prison-760x400-1.jpg 757w, https://technext24.com/wp-content/uploads/2021/02/Bitcoin-prison-760x400-1-300x141.jpg 300w, https://technext24.com/wp-content/uploads/2021/02/Bitcoin-prison-760x400-1-640x301.jpg 640w, https://technext24.com/wp-content/uploads/2021/02/Bitcoin-prison-760x400-1-380x179.jpg 380w, https://technext24.com/wp-content/uploads/2021/02/Bitcoin-prison-760x400-1-550x259.jpg 550w, https://technext24.com/wp-content/uploads/2021/02/Bitcoin-prison-760x400-1-600x282.jpg 600w" sizes="(max-width: 757px) 100vw, 757px">
</figure> 
<p>Meanwhile, Federal Reserve Chairman, Jerome Powell suggested the central bank may halt further rate reductions due to recent Consumer Price Index (CPI) data. “<em>Today was a closer call, but we decided it was the right move,”</em> Powell said during a press conference.&nbsp;</p> 
<h5 id="opposition-to-u-s-central-bank-holding-bitcoin" class="wp-block-heading">Opposition to U.S. Central Bank holding Bitcoin&nbsp;</h5> 
<p>Aside from the federal rate cuts announcement, Powell also mentioned that the Central Bank is not allowed to hold Bitcoin unless approved by Congress. The move has rendered doubts on the proposed crypto reserve by Donald Trump during his campaign.</p> 
<p>Globally, governments around the world hold 2.2 per cent of Bitcoin’s total supply as of July. According to data provider CoinGecko, the United States possesses nearly 200,000 bitcoins valued at more than $20 billion at the current price level. Countries like China, the UK, Bhutan, and El Salvador are the other countries with a significant amount of bitcoins.</p> 
<p>Other countries have also been considering strategic reserves in cryptocurrency. Earlier this month, Russian President Vladimir Putin accused Biden’s administration of undermining the role of the U.S. dollar as the reserve currency. He also undermined its use for political purposes. This has seen many countries turn to alternative assets for reserves, including cryptocurrencies.</p> 
<p>Though Donald Trump confirmed that his administration hopes to set up a strategic Bitcoin reserve and pilot the dominance of the US in the global crypto space, the Federal Reserve’s statement about the Central Bank’s inability to hold Bitcoin has questioned Trump’s ambition for cryptocurrency.</p> 
<p><strong>Also Read: <a target="_blank" href="https://technext24.com/2024/12/16/bitcoin-hits-new-record-high-106000/#google_vignette" rel="noreferrer noopener">Bitcoin hits new record high $106,000 as countries set for strategic reserve in cryptocurrency.</a></strong></p> 
<h5 id="relative-strength-index-rsi" class="wp-block-heading">Relative Strength Index (RSI)</h5> 
<p>In a report by Coinpedia, the price and RSI movements on Bitcoin’s daily chart have been moving inversely in the past few weeks. Even though its price was rising from $89,000 to its all-time high, the RSI kept falling.</p> 
<p>The alternation was a warning sign that a price drop was likely to occur. With Bitcoin price falling, the price and RSI are expected to realign which would most likely lead to a bounce back.</p> 
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 <img loading="lazy" decoding="async" width="697" height="1091" src="https://technext24.com/wp-content/uploads/2024/12/Bitcoin-daily-chart.png" alt="Daily chart" class="wp-image-242280" style="width: 100%;height:auto">
</figure> 
<h4 id="what-next" class="wp-block-heading">What next?</h4> 
<p>As the largest crypto asset, Bitcoin has always had a big influence on the entire crypto market. With its drop, the overall market cap has fallen by 9.31 per cent, now sitting at $3.21 trillion. With trading volume increased by 13.77 per cent since the drop started, more short traders are getting involved.</p> 
<p>Considering its volatility, the crypto market is always full of shocks and surprises. While many expect it to hold its current price and eventually bounce back, the market is waiting for large buy orders. Large buyers also use this kind of period to accumulate assets and wait for what happens next.</p> 
<p>Traders are advised to exhibit caution and be alert to market fluctuations as this might be a bad time to trade. Also, protecting funds should be the most important.</p>

Reasons why Bitcoin price crashed to $93,000 as over 334k traders record huge losses in 36 hours

Technext.ng

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