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Chandan Gupta
Chandan Gupta
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- Dec 20, 2024 15:32 UTC
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Why is Bitcoin Crashing? How Low Could the Price Go?
Bitcoin Price Drops 14% Amid Mt. Gox BTC Distribution and Fed Chair Powell's Anti-Crypto Remarks.
BTC Breaks Key Support Level, Faces Potential Dip to $85,500; Market Eyes Mt. Gox and Powell’s Stance.
Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, is garnering significant attention from the crypto community following a continuous price decline. However, there are several speculations regarding this price drop. Some believe it might be linked to the defunct crypto exchange Mt. Gox, while others attribute it to Fed Chair Jerome Powell’s anti-crypto stance.
Reason Behind Bitcoin Price Crash
On December 19, 2024, Mt. Gox was reported to have distributed $100 million worth of Bitcoin. The report indicates that the firm transferred this substantial amount of BTC to three different wallet addresses, each receiving $30.18 million worth of Bitcoin.
Mt. Gox Payout
The potential reason for the selling pressure created by Mt. Gox is the distribution of billions of dollars worth of BTC to creditors, an event expected to occur in the coming days. However, the exact timeline remains unknown. If this distribution happens, the recent price decline could lower in comparison, and we may witness a substantial drop in Bitcoin’s price.
Jerome Powell’s Stance Adds Pressure
Another potential reason for the recent price decline is Fed Chair Jerome Powell’s anti-crypto stance during the rate cut announcement. In an interview, Powell made a bold statement that has garnered significant attention from the crypto community.
He stated, “We are not allowed to own Bitcoin and have no desire to change the law.” Following this statement, the overall crypto market has been witnessing a price decline.
Bitcoin (BTC) Technical Analysis and Upcoming Level
Besides these two speculations, another potential reason behind this notable price decline is the breakdown of a crucial support level. According to CoinPedia’s technical analysis, BTC has already broken below its ascending support level, which it had maintained since the beginning of November 2024.
Following this breakdown, BTC has experienced a 6.5% price decline but has found support at a horizontal level of $92,500 and is currently beginning to move upward. Based on the recent price action, if BTC fails to hold this level, there is a strong possibility it could drop to $85,500. However, if the support holds, the upward momentum is likely to continue.
In the past three days, BTC has crashed by over 14%, with its price dropping from $106,600 to $92,600. This significant decline has resulted in BTC breaching its crucial ascending support level, which had been intact since the beginning of November 2024.
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