Bitcoin experienced a 5% decline on Thursday, dipping to $64,600 from its earlier position above $68,000. The drop followed a surge on Wednesday, prompted by a dovish stance from the Federal Reserve. Concurrently, the CoinDesk 20 Index (CD20) also saw a 3.5% decline from its peak, with altcoins generally outperforming bitcoin throughout the day.
Altcoins rise while Bitcoin falters
Despite Bitcoin’s retracement, certain altcoins exhibited notable gains. Ripple’s XRP, Filecoin’s FIL, and Internet Computer’s ICP advanced 6% to 7% over 24 hours. Conversely, native tokens of layer 1 networks such as Solana (SOL), Avalanche (AVAX), and Aptos (APT) experienced losses ranging from 2% to 3%.
The resurgence of the U.S. dollar, driven by the Swiss central bank’s unexpected interest rate cut of 25 basis points, contributed to bitcoin’s weakened price action. This move erased the losses incurred following Fed Chair Jerome Powell’s dovish tone despite higher-than-anticipated inflation readings. Typically, a stronger dollar exerts downward pressure on asset prices, affecting cryptocurrencies like bitcoin.
Market analysis and predictions
Market analysis indicates that Bitcoin may have completed its pullback before Wednesday’s rebound. Swissblock, a prominent analytics firm, suggested that Bitcoin’s recent drop to almost $58,000-$59,000 aligned with their earlier projections of an imminent cooling-off period. Henrik Zeberg, an analyst at Swissblock, anticipates “much higher levels” for bitcoin in the upcoming uptrend, suggesting a bullish outlook for both altcoins and bitcoin miners.
While some analysts express confidence in Bitcoin’s resilience, others are more cautious. Crypto trader Jelle believes the correction’s bottom has been reached as long as Bitcoin maintains the $65,000 level. However, he suggests that bitcoin may consolidate within the current price range before resuming its upward trajectory. Jelle highlights the importance of surpassing the $69,000 price level, which marked the peak of the market cycle 2021, to reignite the rally towards higher prices.
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