Bitcoin Drops Below $90,000 as Crypto Summit Fails to Spark Bullish Sentiment
1min read Bitcoin (BTC) experienced a decline, falling below $90,000 after the market discounted the anticipated positive news from the US’ first White House Crypto Summit. Despite the summit being just a day away and promising bullish announcements involving a Bitcoin or crypto reserve, the market showed little interest or optimism. Traders remained cautious, and the price of BTC/USD dropped by 2% on the day, failing to sustain a run to local highs near $93,000.
Analysts like Justin Bennett, who had previously predicted a retest of Bitcoin’s multimonth floor at $78,000, were among those who remained skeptical. Bennett revealed a short BTC position from $91,000, indicating a lack of confidence in the market's ability to break through resistance levels. Nihilus, the pseudonymous founder of crypto trading community Moriband Trading, highlighted the importance of the $90,000 level on daily timeframes as a key support/resistance level. This level is crucial for determining the future direction of Bitcoin's price.
Despite the cautious sentiment, some traders adopted a more positive stance. Crypto Fella suggested that the volatility expected from the Crypto Summit event could lead to a breakout. He noted that while there could be further dips, the current run was far from over. The market's reaction to the summit was mixed, with some traders expecting significant announcements that could boost Bitcoin's price, while others remained skeptical about the potential impact.
Macroeconomic factors also played a role in the market's volatility. US jobless claims, which came in short of expectations, had little impact on market performance. However, trading resources suggested that the odds of the Federal Reserve cutting interest rates sooner were increasing. This could provide a boost for crypto and risk assets, as lower interest rates typically lead to increased investment in riskier assets like Bitcoin.
The latest estimates from the FedWatch Tool saw roughly a 45% chance of the Fed cutting rates at its May meeting. This increase in rate cut odds was attributed to the economic impact of government efficiency moves, which have led to a decrease in interest rates despite a rebound in inflation. The market's focus on the Fed's actions highlights the importance of macroeconomic factors in determining the direction of Bitcoin's price.
Market data also revealed changing patterns in Bitcoin ownership. Short-term holders 