Bitcoin price fell from weekly highs over $74,000 as Federal Reserve chairman Jerome Powell hinted at a cautious approach toward future interest rate adjustments.
However, bulls managed to defend the $70,000 mark, a key psychological support level which prevented a deeper correction into the $60,000 range.
Bitcoin price has fallen over 5% in the past 24 hours, while the total crypto market saw a similar decline after a 3.9% drop.
The global market capitalisation has since stabilised above the $2.5 trillion mark.
As Bitcoin fell, a massive wave of liquidations further accelerated the downward momentum.
In the past 24 hours, over $382 million in long trading positions had been wiped from the crypto market, with the majority coming from Bitcoin and Ethereum, both losing over $150 million each.
Why is Bitcoin price down?
Bitcoin price fell to an intraday low of $70,662 after the macro environment deteriorated in the US.
First, crypto traders reacted to disappointing PPI data.
US PPI inflation rose well above expectations in February, suggesting that inflationary pressures are stickier than previously anticipated.
The Core PPI inflation came in even hotter, rising to 3.9% YoY, which beat estimates while growing 0.5% MoM, well above the forecasted figures.
Markets were already on edge ahead of Powell’s scheduled speech and turned increasingly bearish as odds of rate cuts fell further.
Later, when Powell took the stage, he issued a stern warning that inflation remains elevated.
Especially with recent developments in energy prices linked to Middle East tensions, he noted that these pressures could keep interest rates at restrictive levels.
He pointed out that headline PCE inflation stood at 2.8% and core inflation at 3.0%.
Since both figures remain above the Fed’s 2% target, he signalled that the Fed will remain data-dependent as it is too early to declare victory.
For crypto investors, this reinforces a higher for longer interest rate environment, but the markets were largely expecting some hawkishness given the recent hot economic prints.
What’s next for Bitcoin price?
Even amidst the current volatility, bulls have managed to defend the $70,000 mark, which is currently the key level to watch to determine the immediate short-term direction.
While the crypto markets often see increased selling pressure during the Asian hours, if the Bitcoin price can hold above this psychological floor, it could help stabilise overall investor sentiment.
Bitcoin’s rally earlier in the week was being driven by the strengthening digital gold narrative.
The latest dip could turn out to be another healthy retest, which, if the flagship crypto successfully clears, could lead to a quick recovery toward local highs.
“If price can hold above the $70,000–$69,000 region, there’s a strong case for a move higher to sweep those upside short liquidations before any potential downside continuation,” crypto analyst LP wrote on X.
On the upside, traders will be keeping an eye on the $72,500 resistance level to confirm that the local bottom is in.
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