Bitcoin Drops 10% Amid Fed Rate Hike Fears, Analysts Warn of $76,000

Bitcoin's price has been hovering around $84,000, with analysts cautioning about a potential decline to $76,000 due to the Federal Reserve's monetary policy decisions. The central bank's efforts to control inflation have sparked concerns about the impact on risk assets, including cryptocurrencies. The Fed's aggressive approach to interest rates has led to a sell-off in the crypto market, with Bitcoin's price dropping by over 10% in the past week. The uncertainty surrounding the Fed's next move has added to the volatility, as investors remain cautious about the potential for further rate hikes.

Analysts have warned that if the Fed continues to tighten monetary policy, Bitcoin could face a significant correction. Some analysts predict a drop to as low as $76,000. The situation underscores the sensitivity of the crypto market to macroeconomic factors and the importance for investors to stay informed about the latest developments in monetary policy. The Federal Open Market Committee (FOMC) is widely expected to keep interest rates unchanged until at least June. However, the real focus is on the tone set by Fed Chair Jerome Powell. Analysts are closely watching for any dovish shifts, particularly on growth and inflation expectations.

While Bitcoin has held above $80,000 this week, its position is far from secure. The S&P 500 and Nasdaq Composite Index are both down significantly year-to-date, trailing behind Bitcoin’s 10% rise in the same period. However, traders see troubling signs, indicating a lack of meaningful tailwinds to reverse the current market rout. A more hawkish Fed could mean trouble for Bitcoin. Material Indicators co-founder Keith Alan warned that bad news from Powell could lead to Bitcoin dropping toward $76,000. On the flip side, a dovish stance could push prices higher, helping Bitcoin reclaim key moving averages and avoid a “death cross” between the 21-day and 200-day moving averages.

While Bitcoin consolidates, Ethereum (ETH-USD) jumped 7% in the past 24 hours, outpacing major cryptocurrencies. Other assets saw mixed movement, with Dogecoin (DOGE-USD) climbing 4% and Solana (SOL-USD) rising 3%. Meanwhile, gold soared above $3,000 for the first time, reinforcing its safe-haven appeal amid market uncertainty. The situation highlights the sensitivity of the crypto market to macroeconomic factors and the need for investors to stay informed about the latest developments in monetary policy.