In a few hours, bitcoin erased the rebound that had taken it up to 79579 dollars. BTC fell below 75000 dollars, down to 74984 dollars, its lowest level since August 21. This break occurred le
In a few hours, bitcoin erased the rebound that had taken it up to 79579 dollars. BTC fell below 75000 dollars, down to 74984 dollars, its lowest level since August 21. This break occurred less than 24 hours before a key decision by the US Federal Reserve, while a 25 basis points rate hike is expected. With the 77000-dollar support now broken and market sentiment sharply declining, investors face the Fed verdict in a profoundly reshaped configuration.
This reversal developed in a few hours. Until the afternoon of September 14, bitcoin was still continuing a rally that had taken it above 78000 dollars. The top crypto thus reached a session high of 79579 dollars before gradually losing momentum. Then, selling pressure broke the 77000-dollar support, then drove BTC down to 74984 dollars, its lowest level since August 21. Despite a rebound attempt, the price is currently around 75900 dollars, down 3.5% in one day.
Start your crypto adventure safely with KrakenThis link uses an affiliate program.Bitcoin had remained well above 77000 dollars for about three weeks. Thus, the mood change is reflected in the Crypto Fear and Greed Index. The indicator fell from 81 on August 21, corresponding to an “extreme greed” situation, to 67 on September 15. Since then, the euphoria surrounding US Treasury bond purchases has given way to growing concerns about rising rates.
In a few hours, several indicators demonstrate the extent of the reversal :
Investors must now deal with the FOMC meeting, while Senate negotiations around the CLARITY Act have failed. For Vik Sharma, CEO of Cake Wallet, the expected rate hike does not necessarily call into question bitcoin’s long-term thesis.
He notes :
Higher rates can squeeze corporate profits and weigh on stocks. Bitcoin, on the other hand, has no financial results to disappoint nor a central bank to control its supply.
Sharma thus distinguishes the potential impact of monetary tightening on listed companies from its fundamental consequences for bitcoin. “Traders might react to the same news by selling both, but in my view, a Fed rate hike changes stock outlooks, not the long-term bitcoin thesis.”, he continues. An immediate BTC reaction to the Fed announcement would therefore not, according to this reading, be sufficient to determine its longer-term outlook.
The correction has already cost heavily to traders exposed to leverage. According to reported data, over 98 million dollars of long positions on bitcoin have been liquidated, compared to about 45 million dollars of leveraged short positions. Across the entire crypto market, nearly 300 million dollars of long positions have disappeared, against 190 million dollars of short positions.
Lea Thompson, marketing manager at Cake Wallet, invites looking beyond these immediate moves. “The most important signal lies in how the announced outlook changes expectations regarding real rates, the dollar’s strength, and liquidity conditions,” she explains. The real issue is thus not only in the price reaction after the announcement, but in what it “the evolution of its macroeconomic environment”.
After breaking 77000 dollars, sentiment deterioration, and several hundred million dollars of liquidations in the crypto market, real rates, the dollar’s strength, and liquidity conditions become the main elements highlighted by the cited participants. Bitcoin’s reaction will give a first measure of the reception reserved for the Fed decision, but its orientations will mainly assess the macroeconomic environment that the crypto market will have to face.
