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Bitcoin Plunges, Bulls Exhausted Ahead of Fed Decision

Coin WorldMonday, Jan 27, 2025 10:22 am ET

1min read

Bitcoin Price Analysis: BTC Registers Sudden Drop, Rattles Markets

Bitcoin (BTC) has registered a sharp and unexpected decline as bulls showed signs of exhaustion. The flagship cryptocurrency slumped below the key $100,000 level after dropping over 5% and is trading around $99,100. The sudden drop happened without apparent reasons, although some attribute it to a market selloff sparked by the burgeoning popularity of the China-based artificial intelligence app DeepSeek.

Bitcoin (BTC) Bulls Exhausted

Bitcoin (BTC) bulls are showing signs of exhaustion after powering the cryptocurrency to a new all-time high last week. However, bulls failed to maintain momentum, with the price declining to $102,408. BTC’s unexpected drop triggered a wave of liquidations, with over $128 million in long positions liquidated across the crypto derivatives markets within hours. Total liquidations added up to $371 million, which included $132 million in long positions. Despite the ongoing selloff, open interest in the Bitcoin futures market remains high, crossing $64 billion. BTC’s price fluctuations highlight the battle between market optimism and uncertainty as it enters the last week of January on a bearish note. The liquidations and a substantial increase in selling pressure indicate investor caution. However, high trading volumes and open interest suggest market confidence remains high.

A Crucial Week

Bitcoin (BTC) has shed nearly 6% over the past two sessions, leading to a surge in liquidations. The selloff has led to BTC closing the $2 trillion market cap, as it slid to $1.9 trillion. The decline comes at a time when markets are preparing for a crucial week that can substantially impact the landscape of the crypto market. The Federal Reserve is all set to decide on interest rates on Wednesday. While most analysts expect the Fed to leave rates unchanged, Fed Chair Jerome Powell’s speech after the meeting could impact market sentiment. Interest rates and BTC have become increasingly intertwined, with lower rates helping the crypto market by making it more liquid. Higher interest rates have the opposite impact on the crypto market.

Thursday will see the release of the primary GDP data for the US economy. The US economy is expected to grow by 2.

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