The bitcoin price is dumping sharply in the past few hours, reaching a low of $26,300. This is a result of several factors, such as regulatory pressure, market manipulation, and profit-taking by investors. The dumping has triggered a wave of panic selling and liquidations, causing further downward pressure on the price.
The bitcoin price is now testing a critical support level at $26,000, which could determine the future trend of the market. If the price breaks below this level, it could signal a bearish reversal and a possible downtrend for the next weeks or months. However, if the price bounces back from this level, it could indicate a temporary correction and a continuation of the bullish momentum.
The bitcoin price is dropping, but it is not dead. It is still one of the most innovative and disruptive technologies in the world, and it has a loyal and passionate community behind it. The dumping could also create an opportunity for long-term investors who believe in the fundamentals and the potential of bitcoin to buy at a lower price, presumably MicroStrategy’s founder, Michael Saylor might have fill in positions to scoop the dip. This is just another chapter in the volatile and exciting story of bitcoin.
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Some of the reasons why bitcoin price is dumping
Increased scrutiny from regulators and lawmakers around the world.
High volatility and leverage in the crypto market, leading to liquidations and margin calls.
Investors taking profits after a strong rally in the past year.
Bitcoin price is dumping as a result of a combination of events, such as:
The launch of Bitcoin futures ETFs, which may have increased selling pressure on the spot market. The crackdown on crypto mining and trading in China, which reduced the hash rate and liquidity of Bitcoin. The emergence of new competitors and alternatives in the crypto space, such as stablecoins and metaverse tokens.
Among the factors contributing to the rather boring price action displayed by Bitcoin price and the crypto market in general are the macroeconomic events in the United States. Macroeconomics such as inflation, Consumer Price Index (CPI), Gross Domestic Product (GDP), interest rates, debt, unemployment, and retail sales, among others, have an impact on the crypto market because they control the strength of the U.S. dollar (USD).
It is worth mentioning that Bitcoin trades inversely with the USD, which means any news that renders the greenback weak benefits Bitcoin and vice versa. The Fed will release minutes of the FOMC’s May 2 – 3 policy meeting today, May 24, at 18:00 GMT, providing valuable insights into the Fed’s monetary policy outlook. They will also communicate about the potential for further rate hikes.
As has been the norm, market players will monitor the minutes closely for any hints on the Fed’s stance on inflation, economic growth, and interest rates, which often affect financial markets. Experts assign a 75% chance of the Fed keeping rates unchanged in June but factor in about 160 bps of interest rate cuts until November 2024, according to the CME Group FedWatch tool.
A cohort of Fed speakers has sounded slightly more hawkish of late than anticipated, but Fed Chair Jerome Powell has signaled that tighter banking credit could limit the need to increase rates further.