Bitcoin Price Drop Activates Key Indicator Amid Fed Rate Cuts

According to CoinDesk, Bitcoin's (BTC) price experienced a significant decline following the Federal Reserve's recent decision on interest rates. On Wednesday, the Fed reduced the benchmark borrowing cost as anticipated but indicated only two rate cuts for 2025, a decrease from the four cuts projected in September. The central bank also emphasized its disinterest in participating in any potential government initiative to establish a strategic BTC reserve. Since the announcement, Bitcoin's value has fallen over 8%, reaching lows near $96,000. At the time of writing, the cryptocurrency is trading around $97,500, marking a nearly 10% decrease from the record high of $108,266 achieved earlier this week, as per CoinDesk data. This decline has resulted in the 50-hour simple moving average (SMA) dropping below the 200-hour SMA, confirming a bearish crossover. This pattern suggests the current pullback could deepen, although it has not consistently followed this trend during the recent bull market. Bitcoin has encountered several pullbacks during its rally from $70,000 to over $100,000 post-U.S. election, with each dip concluding with a bearish crossover of the 50- and 200-hour SMAs. The latest crossover provides some optimism for bulls anticipating a return to six-figure values above $100,000. However, any potential rebound might face resistance near $10,600, a level identified by the descending trendline that reflects the recent price decline. Breaching this resistance could pave the way for new record highs. It is crucial to note that market patterns do not always unfold as expected, and the contrary indicator mentioned may not hold, potentially leading to a more significant drop. The first indication of potential trouble would be if prices fall below the overnight low of $96,000, which could expose the swing low of approximately $91,000 recorded on December 5.