Bitcoin fell on Tuesday, posting its third straight day of losses. Market participants remain cautious as they grapple with uncertainty over the impact of U.S. trade tariffs on the market, as well as the Federal Reserve’s interest rate outlook.
Bitcoin was down 0.8% at $95,424.7 by 01:14 ET (05:14 GMT).
Caution among cryptocurrency investors
Investors are closely watching U.S. trade policy. U.S. President Donald Trump has hinted at the possibility of imposing new reciprocal tariffs on countries that tax U.S. imports. Concerns have also been growing that global trade tensions could escalate, which could negatively impact riskier assets such as bitcoin.
Analysts have explained that cryptocurrencies, including bitcoin, are typically sensitive to macroeconomic changes. They are a barometer of investors’ risk appetite. Furthermore, markets are still waiting for greater clarity on the Fed’s future monetary policy.
Fed Expectations and Their Impact on Bitcoin
The latest data on the US consumer price index, released last week, showed that inflation continues to exceed the Fed’s 2% target. This situation has led to speculation that the central bank may maintain its hawkish stance for longer than expected. Higher interest rates typically reduce the appeal of non-yielding assets such as Bitcoin, as investors prefer the safer returns offered by traditional markets.
Hong Kong Partners to Launch Stablecoin
Standard Chartered Bank in Hong Kong, in collaboration with Animoca Brands and Hong Kong Telecommunications, announced a joint venture to apply for a license from the Hong Kong Monetary Authority (HKMA) to issue a dollar-backed stablecoin. The partnership aims to leverage Animoca’s blockchain expertise and HKT services to boost local and cross-border payments in the crypto market.
Most Altcoins Fall as Bitcoin Declines
Stablecoins are digital assets designed to maintain a fixed value relative to fiat currencies. They are often used as a solution for transactions involving digital assets on blockchains, which cannot interact with fiat currencies. The move comes as Hong Kong seeks to become a leading cryptocurrency hub in the region, creating new opportunities for investors.
At the same time, most altcoins saw a parallel decline to Bitcoin’s move, but these saw even bigger declines. Ethereum, the world’s second-largest cryptocurrency, fell 0.8% to $2,663.8. XRP, the third-largest cryptocurrency, fell 4% to $2.5684.
Solana shares fell 9.1%, Polygon fell 5.1%, and Cardano dropped 3.4%. In the meme token market, Dogecoin fell 5.3%, while $TRUMP dropped 7.6%.
Bitcoin Price Analysis: Support Level at $94,393
Looking at the 4-hour Bitcoin price chart, the data shows a failure to break the local resistance. This coincides with the resistance trend line, as Bitcoin failed to surpass the 50% Fibonacci level at $98,611. While the pullback is approaching a crucial support area at $94,393, it is an important point worth watching in the coming days.
Before the recent pullback, the price showed some positive signs, as the current move could be reversed thanks to the support provided by the 23.60% Fibonacci level. However, a retest of this support could put more pressure on Bitcoin.
Forward Outlook: Bearish
If the pullback continues without any major changes in market activity, the probability of the price moving significantly lower could increase. However, technical indicators are still showing slight bullish signals. The True Strength Index (TSI) has reached the oversold zone, indicating a possible reversal in the near future. In addition, the stochastic RSI showed a positive crossover, which is encouraging for investors.
Bitcoin Miners’ Future: Market Confidence Declines
Despite being a very popular digital asset, it faces many challenges in the market, and one of the most important of these challenges is trust among miners. Miners are individuals or companies that use computing power to solve complex mathematical equations to ensure the security of the Bitcoin network. In return, they are rewarded with Bitcoin for their efforts.
However, recent analysis suggests that there is a decline in trust among miners. In one report, it was noted that miners sold more than 2,000 Bitcoins in the past week, reflecting a sense of uncertainty in the market. As a result, the reserve held by miners decreased from 1.8104 million Bitcoins on February 10 to 1.8089 million Bitcoins in the same week.
Reasons behind the decline in trust
- High price fluctuations: Bitcoin, like any other cryptocurrency, experiences extreme price fluctuations. These fluctuations can put pressure on miners who rely on Bitcoin revenue. When the price drops suddenly, it becomes difficult to maintain the profitability of mining operations.
- High costs: Bitcoin mining requires huge investments in specialized hardware (such as ASIC devices) and high energy consumption. If Bitcoin prices are low, it becomes difficult to cover these costs and make a profit.
- General economic effects: Uncertainty in global financial markets, such as trade tensions or changes in monetary policy, also affects the confidence of miners.
Can Bitcoin drop to $90,000?
An important question, and the answer depends on several economic and market factors that affect the price of Bitcoin.
Based on the technical analysis mentioned, there is a possibility that the price of Bitcoin will drop to $90,000 if the decline continues in the current trend. The current support at $94,393 indicates a critical level that could lead to further downward pressure.
