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Bitcoin bears were out on Wednesday, pushing the cryptocurrency below $ 30,000 for the first time since Jan. 2.
Shortly after the fall, the cops pushed the token back above $ 30,000, but the battle continues at the important resistance level.
Bitcoin has lost nearly $ 200 billion in market cap in just three weeks since hitting record highs of over $ 40,000 on Jan. 8.
Long-term Bitcoin investors, however, are in the green due to the huge price increase of the asset in recent years.
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In the past two years, Bitcoin has gained nearly 800%. Over four years that number moves to 3,550%, and if you look back on ten years, early investors have made around 7,791,699% of their original investments.
Still, Bitcoin has declined significantly in the past few weeks.
Matthew Dibb, COO and Co-Founder of Stack Funds, told CoinDesk, “From a technical analysis perspective, the company is consistently making lower highs. Short-term momentum suggests a potential decline to $ 26,000.”
The reasons behind Bitcoin’s downward movement in the past few weeks are not entirely clear, but some analysts have noted that Wednesday’s Federal Reserve meeting could result in prices falling.
“BTC could face selling pressure if Powell signals an early taper,” Darius Sit, co-founder and managing partner of QCP Capital in Singapore, told CoinDesk.
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Cryptocurrencies are often viewed as a hedge against accommodative monetary and fiscal policies, which means that moving towards more Hawkish policies could be problematic.
“Bitcoin seems poised to consolidate a bit more, but if the Fed isn’t cautious enough and the dollar recovers, the $ 30,000 level could easily break,” Oanda senior market analyst Edward Moya wrote in one E-mail.
Still, most observers, including QCP Capital’s Darius Sit, don’t expect Powell to adopt a Hawkish tone. The chairman is likely to commit to a lower interest rate and policy environment in the future.