On the 18th of December, Bitcoin experienced a drop below the $100,000 threshold in response to statements made by Jerome Powell, the Chair of the U.S. Federal Reserve.
During a press briefing, Powell explicitly mentioned that the Federal Reserve has no authority to possess Bitcoin and has no intentions of advocating for legislative changes to enable such holdings.
“There are currently no plans to alter existing laws,” Powell affirmed in response to inquiries regarding a potential Bitcoin reserve within the U.S. government.
Presently, Bitcoin is being traded at $101,292, reflecting a decline of 2.01% over the past 24 hours and 0.18% over the previous week.
Market Uncertainty Triggered by Powell’s Remarks and FOMC Projections
Powell’s remarks, coupled with the Federal Open Market Committee’s (FOMC) revised rate cut forecasts for 2025, instigated a negative response from the broader cryptocurrency market.
By signaling a reduction in the projected number of rate cuts for 2025, Powell generated unease within both the cryptocurrency and stock markets. The announcement, as noted by Santiment, prompted extensive sell-offs.
Altcoins bore the brunt of the impact, with Avalanche, Chainlink, and Litecoin witnessing a decline of 16% each, while Pepe experienced a 17% drop in the preceding 24 hours.
Ethereum (ETH) slumped by 6%, and XRP saw a 10% decrease. Subsequently, Bitcoin’s breach below the psychologically significant $100K level amplified the prevailing bearish sentiment.
Bitcoin’s Key Resistance Levels Through Technical Analysis
Analyst Ali detected a potential head-and-shoulders pattern breakout for Bitcoin, projecting a bearish target of $99,000. However, Ali underlined the necessity for Bitcoin to surpass $105,400 to invalidate the downside perspective.
Market participants are currently closely monitoring these critical levels for further market confirmation.
Despite the prevalent bearish sentiment, noteworthy trading activity persists. Data from IntoTheBlock indicated sustained occurrences of substantial Bitcoin transactions, exceeding $100K, across the year.
Whale activities recorded a seven-day peak of 926.53K BTC on December 16, underscoring sustained institutional engagement.
Market Trends in Trading Volume, Open Interest, and Netflows
Data from Coinglass highlighted a 39.05% surge in trading volumes, reaching $150.01 billion, indicative of escalated market activity. Nevertheless, open interest observed a marginal decrease of 1.10%, settling at $67.77 billion.
Options markets experienced an upward trajectory, with options volume rising by 33.15% to $4.28 billion, while options open interest saw a slight uptick of 0.84%, reaching $41.68 billion.
Exchange netflows portrayed strong accumulation patterns. In 2024, BTC outflows predominated, characterized by consistent red bars signaling diminished selling pressures.
Net outflows worth $43.3 million on December 19 indicated a shift of BTC into cold storage by traders, denoting heightened confidence in the asset.
The collective crypto market capitalization receded by 5% to $3.44 trillion, with trading volumes witnessing a 40% surge, reaching $251 billion.
In light of the challenging conditions faced by Bitcoin and the broader market, traders continue to actively engage, positioning themselves for potential market shifts.