Crypto Analyzer

Bitcoin Price Drops Below $61,000 as Cryptocurrency Market Faces Turbulence

On March 20, the price of Bitcoin experienced a significant drop of 6.4%, falling below $61,000 to reach a two-week low. This decline came ahead of the Federal Reserve’s policy decision and commentary scheduled for later that day. Alongside Bitcoin, Ethereum, the second-largest cryptocurrency, also saw a noticeable decrease of 9%, dropping to $3,075.

The sell-off in Bitcoin was coupled with record outflows from Grayscale’s Bitcoin Trust, which intensified the asset’s losses following its conversion into an exchange-traded fund earlier this year. Grayscale’s ETF recorded a daily outflow of $642.5 million on Monday, as reported by BitMEX Research.

Rajagopal Menon, Vice President at WazirX, commented on the situation, stating, “The low inflow of money into Bitcoin ETFs ahead of the Fed’s Open Market Committee meeting suggests that interest rates may remain high, potentially impacting crypto prices.”

Technical analysis from CoinDCX Research Team indicated that Bitcoin was testing the 200 EMA 4-hour support, with a potential drop below this level leading to the next key support level at $58,700. The resistance level was identified at $64,000.

As a result of the decline in major cryptocurrencies, the global cryptocurrency market cap decreased by 5.8% to around $2.31 trillion within the last 24 hours. Other popular altcoins such as Solana, BNB, XRP, Cardano, Avalanche, Dogecoin, Shiba Inu, and Tron also experienced declines during this period.

Despite the market turbulence, some analysts viewed Bitcoin’s drop as a buying opportunity. Shivam Thakral, CEO of BuyUcoin, noted, “The dip could present a buying opportunity for investors who have been waiting on the sidelines, especially as the halving approaches.”

It was highlighted by the CoinSwitch Markets Desk that BTC had its worst performing day since November 2022, raising concerns about the possibility of another shakeout, particularly with the BTC halving looming less than 30 days away.

It is essential for investors and enthusiasts to stay informed about the latest developments in the cryptocurrency market, especially during times of volatility like the one witnessed on March 20.