Key Highlights
- Bitcoin has witnessed another downfall this week as it plunged below $87,000 with a 3.44% drop
- This comes after the odds of a federal rate cut dropped below 40% in the upcoming Fed meeting
- Rep. Warren Davidson has introduced the Bitcoin for America Act to allow citizens to pay federal taxes in Bitcoin
The downward trend in Bitcoin continued on November 20, pushing its value below $87,000 with a market capitalization of $1.72 trillion. This drop comes amid a massive liquidation and selling pressure.
According to CoinMarketCap, the cryptocurrency is trading at around $86,442.70 with 2.5% drop in 24 hours.
What’s Causing Bitcoin to Fall?
According to the latest report, the odds for an interest rate cut in the next month have dropped significantly, as it has pushed below 40%. This comes after an extended U.S. government shutdown has delayed October jobs data and hawkish signals from the recent Fed statements.
(Source: CME Group)
The Federal Reserve’s interest rate decision plays a very important role in the cryptocurrency market, as these digital assets are highly sensitive to liquidity and risk appetite. Based on previous data, lower interest rates generally help the crypto market increase its price and vice versa.
“There were strongly differing views about how to proceed in December. A further reduction in the policy rate at the December meeting is not a foregone conclusion – far from it,” Jerome Powell said.
Not just this, the Bureau of Labor Statistics has also scrapped its October employment report and delayed November’s until after the Fed’s December 10 meeting. This absence of official data has left policymakers in the lurch and forced them to delay their decision.
According to Ali, the crypto analyst, the next important support level is $82,045. If BTC falls below this level, it could face another catastrophic downfall.
According to Coinglass, in the past 24 hours, the cumulative liquidations crossed the mark of $820.82 million after 223,326 traders got liquidated, sparking fear in the community about its volatility. Other popular cryptocurrencies have also witnessed losses in value. Ethereum (ETH) has dropped over 3%, declining to $2,885, while Solana has plunged to $134, showing some resilience after the launch of Solana ETFs from many issuers, including Bitwise, VanEck, Fidelity, etc.
On October 10, the cryptocurrency market witnessed the biggest liquidation after U.S. President Donald Trump declared a trade war against China, wiping out $19.16 billion worth of crypto investment. This event has created turbulence in the crypto market and damaged investors’ confidence.
Rep. Warren Davidson Introduces Bitcoin for America Act
On November 20, Rep. Warren Davidson introduced the Bitcoin for America Act, which allows citizens to pay federal taxes in Bitcoin and direct all such payments into the Strategic Bitcoin Reserve.
He said, “The Bitcoin for America Act marks an important step toward modernizing our financial systems and embracing the innovation that millions of Americans already use every day.
“By allowing taxpayers to pay federal taxes in Bitcoin and having the proceeds placed into the Strategic Bitcoin Reserve, the nation will benefit by having a tangible asset that appreciates in value over time—unlike the U.S. dollar, which has steadily lost value under inflationary pressures. This bill will give the American people more choice in paying their taxes as well as give our government a stronger financial foundation. The Bitcoin for America Act will position our country to lead—not follow—as the world navigates the future of sound money and digital innovation,” he further added.
GoogleNews