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Bitcoin, the first and largest cryptocurrency by market capitalization fell to lows of $56,500 earlier in the week as investors became jittery about the Fed interest rate decision.
In what seemingly soothed the markets, Fed Chair Jerome Powell doused fears about interest rate hikes, stating that this was unlikely to be the Fed's next move presently. Bitcoin then started to rebound.
On-chain analytics firm IntoTheBlock noted that Bitcoin's drop below $57,000 brought it to the same levels of holders in loss as in similar drawbacks in the previous cycle.
IntoTheBlock highlights the key supply and demand levels to watch for Bitcoin as the crypto market faces uncertainty. These levels have emerged as points of interest, reflecting the ongoing battle between bulls and bears as Bitcoin seeks direction amid volatile market conditions.
The $62,000 level is seen as a significant resistance point, a price at which there are a substantial amount of sell orders. Here, Bitcoin faces significant selling pressure from traders looking to capitalize on short-term gains. This level represents a psychological barrier for many market participants, who view it as a potential point of reversal or consolidation in Bitcoin's price trajectory.
Tomiwabold OlajideConversely, the $58,000 mark is viewed as a crucial support level, a price at which buy orders accumulate, reflecting strong demand. This is seen as a critical line in the sand for Bitcoin bulls, who are keen to defend this level and prevent further downside movement. A breach of this support zone could trigger additional selling pressure and potentially lead to a deeper correction in Bitcoin's price.
In the days ahead, market participants will closely monitor price action for clues about Bitcoin's next move. The recent volatility on the market, driven by a combination of macroeconomic factors and investor sentiment, has heightened uncertainty and added to the significance of these supply and demand zones.
At the time of writing, BTC was up 0.37% in the last 24 hours to $59,095.
Dan Burgin
U.Today Editorial Team
Vladislav Sopov