Bitcoin crashes below $60K as Fed fears rattle investors and markets
Bitcoin has plunged over 50% from its all-time high, dropping below $60,000 for the first time since early 2024. The sharp decline follows fears of tighter US monetary policy after President Trump nominated Kevin Warsh as the next Federal Reserve Chair. Investors have pulled back from risky assets, including cryptocurrencies and tech stocks, while precious metals like gold also fell by around 10%.
The sell-off began after Bitcoin hit a peak of roughly $126,000. Since then, its price has collapsed, mirroring broader stock market trends as traders reduced exposure to high-risk investments. Market sentiment turned to 'extreme fear,' with all major analysts adopting a bearish outlook.
Options data showed some easing of panic, though demand for protective puts remained higher than calls. Technical charts suggested that holding above $60,000 could slow the correction, but caution persisted.
Despite the crash, Bitcoin held in exchange-traded funds (ETFs) fell by just 6.6%, indicating relative stability among long-term holders. ETF inflows had peaked in October before reversing, while gold and silver funds saw increased interest. Analysts at Bitwise warned that prolonged ETF outflows might signal deeper capitulation.
Fidelity's Jurrien Timmer called $65,000 an attractive entry point, while another analyst at the firm viewed sub-$60,000 levels as a buying opportunity based on historical correction patterns.
Bitcoin's steep decline reflects broader market uncertainty, with ETF flows and investor sentiment still fragile. If outflows continue, further drops could follow, though some analysts see current levels as a potential buying window. The cryptocurrency's resilience in ETF holdings suggests not all investors have abandoned long-term positions.
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