Bitcoin Faces Bearish Indications

Bitcoin (BTC) is currently experiencing bearish short-term indications, highlighted by a "death cross" on its hourly chart. This pattern is confirmed as Bitcoin's 50-hour moving average falls significantly below the 200-hour moving average.

Broader Market Sell-off

This bearish signal coincides with a broader market sell-off, resulting in $1.42 billion in crypto liquidations in the past 24 hours, according to CoinGlass data. Bitcoin's price has also been affected, declining as traders navigate through uncertainty.

After hitting a record high of $108,268 on December 17, Bitcoin has dropped over 11% due to decreased expectations for looser U.S. monetary policy. The latest data released on Friday revealed that the personal consumption expenditures price index, the Federal Reserve's preferred inflation indicator, saw a 0.1% increase from October, with an annual rate of 2.4%, both below expectations.

This report follows the Fed's decision to cut its benchmark interest rate by a quarter percentage point to a target range of 4.25%-4.5%, the lowest level in two years. During his news conference, Fed Chair Jerome Powell maintained a hawkish outlook for next year, raising inflation projections and announcing only two expected rate cuts in 2025, a reduction from the previous forecast of four.

Market Reaction and Future Outlook

With fewer rate cuts anticipated, some investors may opt to reduce their exposure to Bitcoin and lock in profits, fueling the sell-off.

As of now, BTC is down 5.35% in the last 24 hours, having previously dipped to $92,115 in Friday's trading session. If Bitcoin closes the day in the red, it will mark its third consecutive day of losses.

While death crosses are typically bearish indicators, they do not guarantee further declines. The market is now focused on Bitcoin's support levels, particularly the psychological barrier of $90,000, which is crucial if selling pressure remains high.

On the upside, a sustained rebound at the $99,974 level could enhance the likelihood of retesting above the $100,000 mark, potentially moving Bitcoin beyond $108,000, with future targets of $113,000 and $125,000.

This article was originally published on U.Today