Bitcoin dips below 96k amid warning of potential $20,000 crash

WEB DESK: Bitcoin maintained its previous day’s gains for only a short period on Thursday before slipping below the $99,000 mark after 01:00 UTC. It remained in the red until 05:12 UTC.

By around 05:15 UTC, Bitcoin was down by $1,271.16, trading at $98,090.12, compared to its previous close of $99,361.28.

Ether also dropped by $60.28, or 1.72 per cent, to $3,435.05. Similarly, Dogecoin was down by 2.53 per cent to $0.3255.

At approximately 8:20 UTC, Bitcoin experienced a further dip, falling to $96,129.18, reflecting a 3.25 per cent decline or a loss of $3,232. The downtrend continued, with Bitcoin dropping to $96,045.04, marking a 3.34 per cent decrease or a $3,316.24 loss.

It then slipped further to $95,796.51, showing a 3.59 per cent decline, equating to a $3,564.77 drop.

By 8:38 UTC, Bitcoin had fallen to $95,751.28, indicating a 3.63 per cent decline and a $3,610 loss. The slide worsened around 8:39 UTC, with Bitcoin dropping 3.71 per cent to $95,679.04, reflecting a total loss of $3,682.24.

Bitcoin has fallen from its all-time high of over $100,000 last week, following BlackRock’s discreet confirmation of a potential bitcoin concern. The price has since plunged towards $90,000, with the Federal Reserve’s monetary policies weighing on the cryptocurrency market.

As Donald Trump announced significant plans for bitcoin, a financial analyst warned of a potential $4.1 trillion reduction in the global money supply, which could lead to a bitcoin price crash of up to $20,000.

“The past trends show bitcoin prices follow global money supply changes with a roughly 10-week lag,” analysts from The Kobeissi Letter posted on X, asking: “Is bitcoin overdue for a correction?”

They noted that the global money supply had dropped by $4.1 trillion, down to $104.4 trillion—the lowest since August—after peaking at $108.5 trillion in October.

“If this relationship holds, bitcoin prices could drop by as much as $20,000 in the coming weeks. Bitcoin’s red-hot run may take a pause,” the analysts suggested.

The Federal Reserve, responsible for controlling the money supply through its monetary policies, has been working to curb inflation this year while also trying to lower interest rates to prevent the economy from slipping into recession.

Last week, the Fed cut interest rates by 25 basis points, as expected, despite rising prices, and indicated it would move cautiously with further cuts in the coming year.

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