Bitcoin Slumps Briefly to $60K Following Fed Stimulus ‘Tapering’ Announcement
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Bitcoin (BTC) suffered a huge blow yesterday, as it fell towards the $60K psychological support as the US Federal Reserve announced plans to cut down its massive stimulus program to curb rising inflation.
This announcement triggered a market-wide correction, although most coins have posted decent recoveries this morning. BTC lost over 5% following the announcement that the Fed will reduce its purchase program by $15 billion a month.
Commenting on the development, Oanda analyst Craig Erlam noted that: “The cryptocurrency is struggling to generate an enormous amount of upside momentum as it continues to drag itself higher since slipping briefly below $60,000 last week.” The analysts also warned that: “Perhaps that’s a sign of a larger correction to come.”
That said, experts expect investors to react further to the news, considering that the Fed’s money-printing activities were what drove increased purchases in inflation hedge assets like Bitcoin. The US Fed’s stimulus ‘tapering’ could trigger a drop in the influx of investment into the crypto market.
Meanwhile, analysts have expressed befuddlement as the trading volume in the BTC spot market continued to drop despite a massive rally seen last month. This decline comes amid a drop in excitement over the approval of two Bitcoin ETFs in the US.
Key Bitcoin Levels to Watch — November 4
After failing to hold above the $64K pivot line, following a bullish breakout on Tuesday, the primary cryptocurrency fell to the $60K psychological support. Following the fall, bulls immediately went into action with intense dip-buying, which helped BTC recover into the $64K – $63K pivot zone. However, the cryptocurrency resumed its downward journey today as it failed to hold the critical pivot zone.
That said, I expect a retest of the $60K support in the near term, which should determine the next course of action for the flagship cryptocurrency. Failure to hold above the $60K support, if the time comes, should send BTC to the lower-$59K area.
Meanwhile, my resistance levels are at $62,000, $63,000, and $64,000, and my key support levels are at $61,000, $60,000, and $59,000.
Total Market Capitalization: $2.73 trillion
Bitcoin Market Capitalization: $1.16 trillion
Bitcoin Dominance: 42.9%
Market Rank: #1
