The crash started roughly at 5:59 GMT with Bitcoin falling more than 2% in a couple of minutes while Ethereum followed with a 5% drop. Other cryptocurrencies were also affected, so it seems like it affected the entire crypto market. For example, Solana fell by 7% in just 3 minutes. All of this happened without a clear catalyst though.
Bitcoin 1 minute chart
In the bigger picture, Bitcoin just dropped into a key level at 111,900 where we got multiple rejections in the past months. This is also where the price is bouncing from as dip-buyers pile back in. A break below this level could take us back to the September low at 107,250 and further below that, the 100K level comes into sight.
Bitcoin daily chart
On the macro fundamental side, the only catalyst we got was the FOMC decision where the dot plot showed a more hawkish rate path than the market was pricing in. Fed Chair Powell though stressed that they don’t want the labour market to weaken further and that’s why they are cutting rates despite inflation being above target.
This is supportive for risk assets like cryptocurrencies but in the short term a hawkish repricing in interest rates expectations could keep a lid on further gains. We would need strong US data for that though.
