The cryptocurrency market experienced a notable downturn, slipping over 6 percent in the past 24 hours to settle at approximately $2.24 trillion on Wednesday, marking a significant decline during the mid-London session.
In a significant development, Bitcoin (BTC) saw its price dip below the critical support range of $59,000 to $61,000 for the first time since February 2024. At the time of reporting, Bitcoin was trading around $57,123, raising concerns among investors and enthusiasts alike.
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The increased volatility in the market led to substantial losses, with nearly half a billion dollars wiped out in crypto leverage trading, predominantly impacting long trades.
Why is the Crypto Market Dipping?
Attention now turns to the United States Federal Reserve, set to unveil crucial market data, including the benchmark interest rates and the FOMC statement. This eagerly awaited data is expected to provide insights into potential interest rate adjustments later in the year.
Hopes for the approval of spot BTC and ETH ETFs in Hong Kong took a hit as these products garnered only a fraction of the interest seen in similar US-based offerings, dampening market sentiment.
The cryptocurrency sphere also grapples with the fallout from former Binance CEO Changpeng Zhao’s (CZ) four-month imprisonment in the United States, as market participants digest the implications of his legal battles.
Bitcoin’s Crucial Support Levels – Analyzed
Renowned crypto trader and analyst, known by the moniker Mags on the X platform, weighed in on Bitcoin’s price movements. Mags emphasized the importance of Bitcoin maintaining support above $57,500 in the coming days to sustain bullish momentum.
According to the analyst, Bitcoin has experienced correction phases ranging between 20-22 percent, making the range between $57,500 and $58,000 a critical support zone.
Mags warned that failure to hold above the current support level could see Bitcoin’s price plummet to below $40k, potentially triggering another bull run in the fourth quarter following a period of macro consolidation.
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