Bitcoin price falls to its lowest level since 2024, and Ethereum declines
Cryptocurrency markets experienced a sharp and sudden decline, with the price of Bitcoin falling to near $70,000, a crucial psychological and technical level for investors. This drop comes amid continued selling pressure on the crypto market, with no technical indicators suggesting that the decline in the value of the world's largest cryptocurrency by market capitalization is imminent.
During early Asian trading, Bitcoin hit a low of $70,052, its lowest level since November 2024. This decline reflects the dominance of bears (sellers) in the market direction, which has caused concern among both individual and institutional traders, especially with the weekly losses exceeding 7%, bringing the currency's losses since the beginning of this year to about 20%.
The impact of US monetary policy and the nomination of Kevin Warsh
Economic analysts link this rapid and sharp decline to recent developments in the US monetary policy landscape. The primary driver of this downturn is the nomination of Kevin Warsh to head the Federal Reserve (the US central bank). Warsh is known in economic circles for his hawkish monetary policies, creating expectations that he will pursue policies that could keep interest rates high or reduce liquidity in the markets.
The relationship between interest rates and high-risk assets like cryptocurrencies is inverse; the more expectations of tighter monetary policy grow, the less risk appetite investors have, prompting them to flee crypto and stock markets for safe havens like the dollar and government bonds. This shift in sentiment was the direct cause of the recent sharp sell-off in the market.
Ethereum is nearing the danger zone
Bitcoin wasn't the only casualty of this downward trend; Ethereum, the second-largest cryptocurrency, was also negatively impacted. Ethereum fell 0.7% to $2,111. Analysts are watching this level very closely, as concerns grow that it could break the psychological support level of $2,000 for the first time since May of last year.
Data indicates that Ethereum has suffered significant losses of nearly 30% since the beginning of this year, placing it in a precarious technical position compared to Bitcoin. This poor performance reflects declining confidence in the decentralized finance (DeFi) and smart contracts sector amidst unstable macroeconomic conditions.
Future outlook for markets
The most pressing question now is whether the $70,000 level can hold as a buffer against further declines for Bitcoin. Breaking this level could open the door to deeper drops, potentially targeting lower historical support levels. Meanwhile, investors are awaiting any positive signals from monetary policymakers or economic data that might alleviate tensions and restore some stability to global financial markets.
