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Bitcoin drops to $66,000 as U.S. equities falter following Fed minutes indicating potential rate increase.
Bitcoin is on course for its fifth consecutive weekly drop, and a breach of this level could lead to a new downward movement.
Bitcoin (BTC) price on Feb. 18 (CoinDesk)
What to know:
- On Wednesday afternoon, Bitcoin retraced to $66,000, testing the lower boundary of its recent trading range.
- Crypto-related equities reversed their early gains, with Coinbase shifting from a 3% increase in the morning to a 2% downturn, while Strategy declined by approximately 3%.
- Unexpectedly hawkish minutes from the Federal Reserve strengthened the U.S. dollar, exerting pressure on risk assets.
After fluctuating early on Wednesday, bitcoin declined during the U.S. afternoon session, dropping to session lows beneath $66,000, thus applying pressure back on the lower end of its recent range.
Having traded at $68,500 overnight, BTC has decreased by 2.5% over the past 24 hours and is currently trading at $66,200.
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Crypto equities, which began the day on a positive note, followed suit, retracting their gains or entering declines across the board. Notably, Coinbase (COIN) transformed its 3% morning rise into a 2% decline by afternoon. Strategy (MSTR), the largest corporate holder of bitcoin, fell by approximately 3% as the primary asset weakened.
After a vigorous start to the session, U.S. stocks relinquished much of their gains shortly before the trading close. Contributing to this was unexpectedly hawkish minutes from the January meeting of the Federal Reserve’s Federal Open Market Committee (FOMC). While most members of the central bank concurred with the decision to halt rate cuts, several suggested the Fed might prefer “two-sided” guidance, indicating a potential for rate hikes if inflation remains persistent.
Already higher for the day, the U.S. dollar gained further strength, with the dollar index (DXY)—which assesses the greenback against a selection of major foreign currencies—rising to its highest level in almost two weeks. A stronger dollar typically impacts risk assets negatively, and Wednesday’s crypto decline seemed to align with that trend.
With today’s drop, bitcoin is now facing its fifth consecutive week of declines, marking its worst stretch since the prolonged bear market of 2022.
It also confronts a critical evaluation at current levels. The $66,000 zone acted as support last week and facilitated a rebound above $70,000. Should that support level be decisively breached, traders may begin to target the early February lows at $60,000 or anticipate a further downward movement.
