Bitcoin Plunges 6% Ahead of Fed Meeting, Tests Key Support

Bitcoin's price has taken a bearish turn ahead of the Federal Reserve's (Fed) meeting, with the cryptocurrency experiencing a 6% drop. This decline comes amidst shifting sentiments in the U.S. stock market, which has been influencing Bitcoin's price movements. Traders are bracing for potential volatility as they await crucial economic signals from the upcoming FOMC meeting.

Over the past few months, Bitcoin has been trading within a range of $92,000 to $106,000, with the mid-range level at approximately $99,000 serving as a significant support and resistance barrier. Recent price declines have brought Bitcoin precariously close to this mid-range support level, sparking discussions among traders regarding its short-term trajectory. The current market sentiment indicates a bearish outlook, especially as recent trading volume has remained subdued. A breach below the mid-range support could catalyze further bearish momentum, potentially pushing Bitcoin prices down towards the $92,000 mark.

Technical indicators support this bearish stance, with the Moving Average Convergence Divergence (MACD) showing a recent crossover that indicates a potential loss of bullish momentum. However, the Accumulation/Distribution (A/D) indicator suggests that the recent selling was more a reaction to external market pressures rather than a direct reflection of Bitcoin's inherent value.

The recent volatility in Bitcoin's price has been significantly influenced by external factors, particularly fluctuations in the U.S. stock market. The Nasdaq 100 futures reported a dip of 2.9%, with an expected loss of approximately $1 trillion at market open. Such declines naturally trigger caution in crypto markets, leading traders to adopt a risk-off mentality. Additionally, the impact of China's DeepSeek LLM model on U.S. equity sentiment has created uncertainty, further exacerbating price corrections in cryptocurrencies like Bitcoin. Traders are currently positioning themselves ahead of the Federal Open Market Committee (FOMC) meeting, anticipating shifts in monetary policy that could influence asset valuations across the board.

Despite the downward pressure, Bitcoin's broader fundamentals remain intact, suggesting any corrections may be short-lived. Analysts advise watching for changes in trading volume and further technical signals that could confirm a reversal, especially if BTC remains above the critical $92,000 support level. Market participants are