Bitcoin, hit by double whammy of Fed rate freeze and Middle East crisis...Will $70,000 collapse?

▲ Bitcoin (BTC), cryptocurrency decline/AI generated image

Bitcoin (BTC) experienced a sharp decline, breaking through major support levels, as a double whammy of the US Federal Reserve's (Fed) policy of maintaining high interest rates and the geopolitical crisis originating from Iran converged.

Cryptocurrency specialized media 99Bitcoins reported on April 30 (local time) that Bitcoin's price dropped to $75,100 during intraday trading, leading to a sharp contraction in investor sentiment. While the US Federal Reserve maintained its tight monetary policy by freezing the benchmark interest rate within the range of 3.5% to 3.75%, former US President Donald Trump's outright rejection of Iran's proposal to reopen the Strait of Hormuz shocked the market.

Virtual asset analyst Ted Pillows analyzed that Bitcoin must retake the resistance zone between $79,000 and $80,000 to prevent further downward pressure. Pillows warned, "If it fails to surpass this zone, the price could be pushed down to $74,000," adding, "The psychological bottom line of $70,000 could be tested."

The research team at on-chain data analysis firm Glassnode also assessed the current market structure as structurally vulnerable, citing the fact that Bitcoin remains below its True Market Mean of $79,000.

Shubh Varma, CEO of Hyblock, interpreted this price correction as a typical 'sell the news' reaction occurring after a Federal Open Market Committee (FOMC) announcement, cautioning against excessive fear. Varma explained that a strong actual buying power is forming beneath the volatility, pointing to a record-low global bid-ask ratio of 0.3. Glassnode analyzed that a strong accumulation zone for institutional investors has been created in the $65,000 to $70,000 range, based on robust capital inflows into Bitcoin spot ETFs and increased open interest on the Chicago Mercantile Exchange (CME).

Bitcoin's future trajectory is predicted to follow three paths. A bullish scenario targeting $84,000 is valid if it recovers $80,000 within a week and geopolitical tensions ease, stabilizing oil prices. A sideways scenario, where it trades between $74,000 and $78,000 without a significant breakthrough until the end of the month, coexists with a bearish scenario, where the Iran crisis intensifies, expectations for interest rate cuts disappear, and the $65,000 level is tested. The market is currently passing through a phase where the risk premium due to the Iran situation is directly reflected in the price.

The support zone between $73,000 and $75,000 has been tested twice recently, opening up the possibility of forming a double bottom. The defense of this support level during the final closing price determination at the end of the month is expected to be a critical turning point that will decide the future mid-to-long-term trend. Expectations for a technical rebound also exist, as the reliability of the accumulation zone, where institutional funds are flowing in, remains high.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. This content should be interpreted for informational purposes only.*