The cryptocurrency market has recently entered a turbulent phase, primarily driven by economic shifts as the US Federal Reserve (Fed) opts to delay interest rate cuts for the second consecutive meeting. This decision has had a ripple effect, pushing Bitcoin (BTC) below the crucial $72,000 mark and triggering a market-wide liquidation exceeding $450 million within just 24 hours. During this tumultuous period, cryptocurrencies like LayerZero (ZRO), Bonk (BONK), and Zcash (ZEC) are leading the charge in losses, each experiencing substantial declines in value.
Delay in Rate Cuts Weighs Down on the Crypto Market
In a recent announcement, US Fed Chair Jerome Powell confirmed that the interest rate would remain unchanged, following a close voting decision of 11-1, with dissent from Fed Governor Miran advocating for a cut. This strategic move comes amid increased concern about potential economic ramifications, particularly related to ongoing geopolitical tensions, such as the U.S.-Iran war. The forecast for the Personal Consumption Expenditures (PCE) inflation rate for 2026 has notably risen to 2.7%, signaling economic uncertainties that make the Fed’s cautious approach understandable.
The immediate reaction to the Fed’s decision has been significant within the cryptocurrency market, leading to liquidations totaling approximately $451.93 million over the past 24 hours. Long positions bore the brunt of this pressure, with more than $382.01 million in long liquidations, illuminating the market’s renewed bearish sentiment.
Bitcoin Under Pressure, Risks a $70,000 Breakdown
As of Thursday, Bitcoin hovers around $71,000, marking its third consecutive day of losses. The most recent decline of 3% has not only brought Bitcoin below the 50-day Exponential Moving Average (EMA) at $71,089, but it has also stirred concerns of slipping below the critical Fibonacci support level at $68,839. Should Bitcoin fall past this threshold, the next support is seen at the February 5 low of $62,945.
Technical indicators indicate further bearish sentiment. The Moving Average Convergence Divergence (MACD) online is drifting lower towards the signal line, indicative of waning bullish momentum. The Relative Strength Index (RSI) currently measures 51, dipping toward the midline, portraying the ongoing correction that has settled in as mid-week unfolds.
For Bitcoin to regain a bullish trajectory, it must close above the 50-day EMA at $71,089, which would pave the way for a possible upside to the 50% Fibonacci retracement level near $78,258.
Top Crypto Losers: LayerZero, Bonk, and Zcash Lead Losses
LayerZero finds itself down 2% as of Thursday, extending its previous day’s 8% fall. Despite recent setbacks, the immediate bias appears cautiously bullish, as ZRO stays above the rising 50-day EMA. The 100-day EMA has begun to incline, which could suggest improved underlying trend conditions post the recent peak near $2.31.
However, the MACD is flashing caution, as it remains positive but shows signs of rolling over towards its signal line, illustrating fading bullish momentum. The RSI, currently at 56, remains above its midline, hinting at a modest bullish tone, albeit without indicating overbought conditions.
Initial support is revealed at the 50-day EMA around $1.86; a breach here could expose the 100-day EMA at $1.77, testing the sustainability of the medium-term uptrend.
On the upside, immediate resistance is at the recent swing high near $2.40, where a daily close above is imperative for re-establishing bullish momentum.
Bonk remains steady at around $0.00000600, although it has suffered a 7% drop recently. The technical environment appears neutral yet slightly bearish, as BONK is operating within a consolidation range, with EMA indicators trending downwards. The RSI near the mid-40s indicates a lack of directional pressure.
Formidable immediate support is at the floor of the consolidation range at $0.00000559, followed by the S1 Pivot Point at $0.00000498.
Meanwhile, Zcash is trading around $250 following an 8% decline. The outlook appears mixed, as ZEC struggles to surpass its 200-day EMA at $281 after initially breaking above a long-standing descending resistance line, indicating challenges in moving away from the previous downtrend.
Nevertheless, momentum indicators like the MACD suggest improvements; the MACD line remains above its signal line, and the RSI at 54 indicates moderate bullish momentum.
Initial resistance for Zcash emerges at the 50-day EMA around $263, with significant resistance viewed at the recent swing high near $276.
On the downside, immediate support is at the broken trendline around $234, where a failure to hold could expose levels as low as $197.90, threatening the bullish bias that is still in its infancy.
(The technical analysis within this article has been assisted by AI tools.)
