Wednesday

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<p>Wednesday witnessed a kind of weird rebound for Bitcoin, as the entire crypto market took a breath from its recent downturn. Amidst a volatile day, Bitcoin made a surprising pivot, climbing 1.7% to settle at $65,773. This came after an initial dip to $60,793.<a href="https://www.cnbc.com/2024/03/20/bitcoin-btc-price-falls-as-cryptocurrencies-lose-400-billion-value.html" rel="nofollow noopener" target="_blank"> </a></p> 
<p>Cryptos gained some ground back following the closure of the Federal Reserve’s two-day meeting. Keeping rates on hold as anticipated, the Fed’s indication of multiple rate reductions this year sparked a flicker of bullishness in financial markets. Similar to tech equities, Bitcoin and its comrades often find themselves in a sweet spot with low-interest rates, which can bring in enhanced market liquidity and a sense of optimism amongst investors.</p> 
<p>The connection between interest rates and Bitcoin’s valuation has been a topic of discussion among market analysts for the past decade. “There’s a kind of seesaw effect between the two,” one could say. Throughout 2022, when the Federal Reserve took on a hawkish stance by ramping up interest rates, we saw how it inadvertently siphoned off liquidity from the market, hitting both tech stocks and Bitcoin pretty hard. Meanwhile, a dovish tilt with rate cuts injects liquidity back, potentially strengthening risky assets like Bitcoin. And despite a 10% drop in the past week from its zenith of $73,800, the oldest crypto remains 53% up for the year, showcasing its resilient appeal.</p> 
<h2 class="wp-block-heading" id="a-mixed-bag-across-the-crypto-spectrum">A Mixed Bag Across the Crypto Spectrum</h2> 
<p>Other members of the crypto ensemble, such as <a href="https://www.cryptopolitan.com/sec-subpoenas-spark-fear-over-ethereum-etf-futures/" data-type="post" data-id="489422">Ethereum</a>, also saw a rise, inching up 1.2% to $3,379, although it had previously breached the $4,000 mark. Tokens from Polygon and Solana showed varied performance, with Dogecoin notably leaping by over 7%.</p> 
<p>Investor interest seemed to ripple through to crypto-related stocks too, as they witness notable upticks throughout the day. Coinbase surged 11%, and MicroStrategy, in spite of a rough start to the week, rebounded with a 9% gain. Crypto miners, including Iris Energy and CleanSpark, saw impressive jumps of 26% and 22%, respectively, while Marathon Digital and Riot Platforms also enjoyed gains, caused by an optimistic assessment from JPMorgan.</p> 
<p>The broader market indices, including the Dow Jones Industrial Average, S&amp;P 500, and Nasdaq Composite, basked in the aftermath of the Fed meeting, all closing at record highs.</p> 
<p>The recent tremor in Bitcoin’s price is attributed to profit-taking activities, as traders capitalized on the massive rally from the start of the year. One report from CryptoQuant highlighted a spike in short-term holders liquidating their Bitcoin for profit around March 12. This profit-taking triggered a sort of domino effect, resulting in a huge number of leveraged positions being liquidated, further exacerbated by the market’s volatility at the beginiing of the week.</p> 
<h2 class="wp-block-heading" id="a-precarious-balance">A Precarious Balance</h2> 
<p>The precedent in Bitcoin bull markets shows that 20%-30% retractions are not out of the ordinary and can even be seen as a recalibration mechanism when markets reach their boiling points. The past week’s activities showed us just how heated the market had become, with signs of exuberance reaching palpable levels.</p> 
<p>However, with Bitcoin’s price wobbling at the $60,000 brink, there’s speculation about further descent, potentially testing the waters between $50,000 and $55,000. Such a scenario is considered a critical juncture for the bull run’s continuity, marking a make-or-break point.</p>

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