- Bitcoin hits a new record high but faces a sharp pullback after Fed's hawkish stance.
- A key support level breakdown puts Bitcoin at risk of further declines.
- The $92,800 to $95,500 range is crucial for Bitcoin’s potential rebound.
- Take advantage of our Extended Cyber Monday offer—your last chance to secure InvestingPro at a 55% discount!
Bitcoin began the week with optimism, reaching a new record high near $108,000, buoyed by positive statements from U.S. President Trump about the crypto's potential as a reserve asset. However, the mood quickly soured midweek as the Federal Reserve’s hawkish stance triggered a significant pullback in the cryptocurrency market, and Bitcoin's momentum stalled.
As traders awaited the Fed’s decision, the market had priced in a 25-basis-point rate cut, but uncertainty lingered over Jerome Powell’s speech, which ultimately revealed a more hawkish outlook.
Powell’s remarks, particularly his warning about future interest rate cuts and a rise in inflation forecasts, sent shockwaves through risk on assets, triggering a sell-off. His negative comments on Bitcoin also contributed to the decline, with investors fleeing to safer assets.
The result was a sharp reversal, which had been in overbought territory since November. The Fed’s actions acted as a catalyst for profit-taking, and panic selling quickly took hold. By the end of the week, the crypto had shed 7% of its value, while altcoins suffered even more, with a 15% drop in market capitalization. Despite this, Bitcoin’s market dominance increased, rising from below 55% two weeks ago to 60%. However, the broader crypto market capitalization retreated to $3.3 trillion, indicating a critical juncture.
Bitcoin’s Key Support Levels to Watch Amid Growing Selling Pressure
The cryptocurrency has broken through an important support level, signaling the potential for further downward movement. Bitcoin had been in an ascending channel since mid-November, but this bullish trend was interrupted by the Fed’s hawkish turn.
The key support level to watch was $98,750, and its breach has led to a test of $95,000 as the week draws to a close. If Bitcoin fails to hold this level, it could slide toward $92,800, with further losses possibly down to $88,000 or even $83,000.
Looking ahead, the $92,800 to $95,500 range is critical for a potential recovery. If Bitcoin can maintain this zone through the weekend, a rebound could be on the horizon. However, for the trend to reverse, Bitcoin needs to reclaim the $98,750 level and eventually break above $100,000. Failure to do so could intensify selling pressure, pushing Bitcoin further down.
While the current cycle mirrors last year’s pattern, it remains to be seen whether Bitcoin can avoid a similar fate. Last year, a period of consolidation gave way to a surge fueled by expectations of Fed rate cuts and the launch of Bitcoin ETFs. In 2025, Trump's actions on crypto and easing inflation and labor data could trigger another rally. If these factors align, Bitcoin could continue its upward trajectory, despite short-term corrections.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk rests with the investor. We also do not provide any investment advisory services.
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