Bitcoin Fell Below $57,000 to its Lowest Level Since February
Bitcoin closed the month with a 14% drop after seven months of growth. On May 1, the main cryptocurrency fell to its lowest level since February.
A new low was formed at $56,550. After Bitcoin reached an all-time high of $73,800, the price has continued to fall in recent weeks as more investors expect a bearish reversal.
One of the major blows to the crypto market came from the Federal Reserve, which decided to leave the interest rate unchanged. The agency kept the rate at 5.25%-5.50% and stated that it is not appropriate to cut rates until there is confidence that inflation is moving towards 2%.
At the conference that followed the Fed's data release, Chairman Jerome Powell also emphasized that it would take more time for a rate cut this year. The expectation of a prolonged continuation of high interest rates influenced the 10-year U.S. Treasury bond yield to rise from 4.60% to 4.69%. The high yield could potentially send the Bitcoin price even lower.
Interestingly, Powell's speech coincided with record outflows from the Bitcoin ETFs. According to CoinGlass, the total net outflows totaled $563.7 million, the largest since their launch on January 11. In the last week of April, investors withdrew nearly $1.2 billion from the ETFs.
The drop in Bitcoin price has led to the liquidation of 73,573 traders in the last 24 hours. The total amount of liquidations on the market amounted to $256.65 million. The largest liquidation order came from the OKX exchange at $6.57 million.
Meanwhile, Bitcoin's fall to February lows has caused concern among experts. Standard Chartered Bank warned of a possible further fall of the main cryptocurrency. According to experts, breaking through the $60,000 support level opens the way for a potential decline to the $50,000-$52,000 range.
However, CryptoQuant is confident that the Bitcoin price slump is nearing completion, as miners are still reluctant to sell the cryptocurrency.
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At the time of writing, Bitcoin is trading near the $58,000 resistance level, where bears have become active. The key resistance level is the $60,500 mark, a break above which could send the price to $61,500 and $63,500 at best.
On the downside, the Bitcoin price could test the $57,000 support level and fall to $56,500, $55,000 and $53,500 in the near term.
This is not a 100 percent statement. The cryptocurrency market is very volatile. Investors should exercise caution when making decisions.
