The Bitcoin (BTC) price has experienced another significant drop in recent days. While the coin reached $114,000 earlier this week, it now trades around $111,700. In a short period, Bitcoin lost over $2,000 in value. This decline follows the US Federal Reserve‘s interest rate cut and the subsequent uncertainties regarding further monetary policy.

Why is the Bitcoin price falling?

Bitcoin‘s decline coincides with a broader correction in financial markets, both in stocks and crypto. The US stock market also closed in the red for the second day in a row. It appears that global markets are taking a breather after a strong period in which investors had priced in significant gains. The market initially expected an aggressive path of further rate cuts towards the end of 2025. However, many central bankers now indicate that these expectations should be adjusted downwards, with fewer rate cuts anticipated than previously thought. While additional cuts could be positive for risk assets like Bitcoin, the pressure on the coin may increase if these cuts do not materialise.

Key support level in sight

Despite the current weakness, analysts remain reasonably optimistic about Bitcoin in the near term. According to market researchers at Glassnode, Bitcoin is in a similar situation to early April 2025, when the coin embarked on an explosive rally. They point out that Bitcoin has cooled off considerably in recent days and may now be ready for the next upward move. It is crucial that the price holds above $111,400. This level is seen as a key threshold: staying above it makes a recovery to higher levels more likely, while a prolonged drop below it could lead to a weaker market structure.

Opportunities and risks for Bitcoin

For now, the market appears to be in a zone of uncertainty. The prospect of fewer interest rate cuts is weighing on sentiment. At the same time, Bitcoin‘s fundamentals and long-term outlook remain strong. Analysts therefore advise patience and caution. Whether the current dip is just a healthy pause or the start of a longer period of weakness will become clearer in the coming weeks.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making any decisions.