Concerns about interest rates put pressure on Bitcoin

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The world's largest cryptocurrency once surpassed the $100,000 mark thanks to a prolonged recovery from the late December drop. However, losses on Tuesday and Wednesday wiped out this recovery entirely, bringing Bitcoin back near its late December lows.

Bitcoin fell 0.3% to $96,607.7 at 12:49 AM ET (5:49 AM GMT), after losing more than 5% on Tuesday.

Bitcoin also faced profit-taking pressure after an impressive 2024. Most of Bitcoin's gains followed Donald Trump's victory in the presidential election, as he promised to implement pro-cryptocurrency policies.

However, the cryptocurrency market is now awaiting further signals on Trump’s policy plans as he assumes office on January 20.

December’s Purchasing Managers' Index (PMI) data, while painting a brighter picture of the U.S. economy, also raised concerns that inflation may persist in the coming months, giving the Fed more reason to reduce interest rates gradually.

The central bank downgraded its rate-cut forecasts for 2025 in its December meeting, citing concerns about persistent inflation and confidence in the labor market.

Fed officials reiterated this message earlier this week.

Prolonged high interest rates are unfavorable for speculative assets like cryptocurrencies, as they limit the liquidity flowing into this sector. This trend hurt the cryptocurrency market throughout 2022 and much of 2023.

CFD Trading Strategy with BTC
The larger trend on the H4 timeframe is showing the formation of a parallel descending channel, with strong bearish candlestick closures on both H4 and D1. The analyst's view remains to wait for price retracements to key resistance levels and main FIBO levels to look for SELL opportunities.

SELL ZONE: 96,750 - 97,250
SL: 99,000
TP: 94,000 - 92,500 - 90,000 - ????
Strictly adhere to the Take Profit (TP) and Stop Loss (SL) levels to ensure account safety.
GOOD LUCK!