Bitcoin experienced a significant decline on Thursday, falling back under the $63,000 mark as the overall cryptocurrency market shed approximately 4%. This downturn stands in stark contrast to the recent surge seen in AI-related stocks, highlighting an emerging divergence between these two sectors.
Contributing to this crypto sell-off is the decision made by Kevin Warsh during the Federal Open Market Committee (FOMC) meeting on Wednesday. While Warsh opted to maintain interest rates, he offered no forward guidance, causing the market to reassess expectations. Currently, only a 15% probability is priced in for rates remaining stable through December. Notably, nine members of the committee anticipate a rate hike by the year’s end. Historically, as seen before previous rate hike cycles, the rising 2-year Treasury yield alongside a stronger dollar can exert downward pressure on cryptocurrency prices.
In another notable market development, both Strive’s SATA and STRC stocks fell drastically on the same day. The anticipated rotation narrative from STRC into SATA for its daily dividend collapsed, with SATA dropping 3.15% to $96.85, substantially below its $100 par value.
The outlook for Bitcoin appears increasingly precarious, having dipped below the critical Fibonacci level of $64,968. The Supertrend indicator has once again turned bearish, triggering concern that the recovery initially witnessed from a low of $59,000 may have faltered. Currently, the full Exponential Moving Average (EMA) stack is positioned between $66,024 and $78,250, and with the next Fibonacci level at $62,725 now being tested, a fall below this could lead to a retest of June’s absolute low of $59,098. Should Bitcoin reclaim $64,968, a path towards a recovery toward $66,024 and then $69,940 could be reestablished.
In the case of XRP, the cryptocurrency has retraced its entire breakout from June 15, falling back below the 20 EMA at $1.1989 and pressing against the 0.236 Fibonacci level at $1.1246. Failure to hold this level could result in a direct retest of the June lows, which stand at $1.0509. Conversely, regaining the $1.1989 level could reignite prospects for a recovery toward $1.2071 and then $1.2440.
Meanwhile, ADA also faced challenges, dropping to $0.1613 and sustaining the descending trendline established back in January. With both the Supertrend at $0.1977 and the Parabolic SAR at $0.1898 positioned as overhead resistance, a drop below the critical $0.1500 threshold could open the door to even lower levels, targeting $0.1400 and potentially $0.1200. However, maintaining a reclaim of the Supertrend at $0.1977 could pave the way for targets at $0.2200 and $0.2451.
