Bitcoin (BTC), known as the world’s leading cryptocurrency by market capitalization, is currently at the center of a heated discussion within the crypto community due to a persistent decline in its price. This downward trend has sparked a variety of speculations and theories. While some observers suggest a connection to the now-defunct crypto exchange Mt. Gox, others point fingers at the negative stance of Federal Reserve Chair Jerome Powell towards cryptocurrencies.
Exploring the Causes of Bitcoin’s Recent Price Drop
On December 19, 2024, reports surfaced about Mt. Gox distributing a staggering $100 million worth of Bitcoin. The details indicate that this significant amount of BTC was transferred to three distinct wallet addresses, with each receiving approximately $30.18 million worth of Bitcoin.
Impact of Mt. Gox Payout on Bitcoin Market
The selling pressure attributed to Mt. Gox is largely due to the anticipated distribution of billions of dollars worth of Bitcoin to creditors, an event that could unfold in the coming days. The exact schedule for this distribution remains uncertain. Should this occur, the current price decline might appear minor, potentially triggering a more pronounced drop in Bitcoin’s value.
Jerome Powell’s Anti-Crypto Stance Intensifies Market Pressure
Another contributing factor to Bitcoin’s recent price dip is the adverse stance adopted by Fed Chair Jerome Powell during a rate cut announcement. Powell’s bold assertion, “We are not allowed to own Bitcoin and have no desire to change the law,” has resonated deeply within the crypto community. This statement has coincided with a broader downturn across the crypto market, exacerbating the decline in Bitcoin’s price.
Bitcoin (BTC) Technical Analysis and Prospective Movements
Beyond these speculations, another plausible explanation for Bitcoin’s notable price decline is the breach of a vital support level. According to an analysis by CoinPedia, BTC has fallen below an ascending support level it had sustained since early November 2024. This technical breakdown has led to a 6.5% decrease in BTC’s price, although it has found some stability at a horizontal support level of $92,500, showing signs of a potential upward movement.
If BTC fails to maintain this support, there is a significant likelihood of further decline to $85,500. Conversely, if the support holds firm, the upward momentum could persist. Over the past three days, Bitcoin has experienced a sharp decline of over 14%, with its price plummeting from $106,600 to $92,600. This dramatic drop has resulted in BTC breaching its crucial ascending support level, which had remained intact since early November 2024.
As the cryptocurrency market continues to evolve, investors and analysts remain vigilant, closely monitoring these developments to assess the potential impact on Bitcoin’s future price trajectory.
