Crypto market Declines Today: BTC Encountered $110k Resistance
BTC was unable to regain the $110k threshold, encountering a significant price drop that transformed the market into a frenzy. What strategy is
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playing, and what outcomes might we anticipate?
Is it the global political landscape or merely profit-taking below the peak? Purging the less committed before launching into a new peak or signaling the onset of a new bear market?
Bitcoin and the Crypto Environment Facing Challenging Times
Today, Bitcoin underwent a substantial dump with numerous long positions getting liquidated. This was due to various factors, notably that the Fed did not lower interest rates as anticipated. On May 7, 2025, they declared that rates would remain at 4.25%-4.50%.
This statement indicated a shift in sentiment from uptrend to pessimistic, instigating the beginning of measured profit-taking and risk reduction among traders.
FOMC minutes release at 2PM EST today.
Markets are stalling like an elderly person attempting to post a meme.
Previously, on May 6–7, the Fed maintained rates at 4.25%–4.50%.
They described the economy as solid and the labor trading market as robust.
Classic Federal Reserve rhetoric – calm on the surface, panicking behind the… pic.twitter.com/9Zt6ZRT5yx
— Chapo (@El_Crypto_Chapo) May 28, 2025
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This somehow fueled speculation that the Fed might lower rates at the June meeting or potentially even sooner by the end of the month. All of this speculation was unsupported by credible information, leaving crypto market participants in disarray.
Another major influence impacting the overall trading market is the unpredictability generated by President Donald Trump’s tariffs. These include 10% tariffs on imports from over 57 countries and staggering 145% tariffs on products imported from China.
This led to a tariff trade war that has had a severe impact on the market. No long or short positions have been secure, and numerous liquidations have occurred. The most recent update is the introduction of a 50% tariff on all European Union imports, effective June 1, 2025.
BREAKING: President Trump is imposing a 50% tariff on the European Union starting June 1st. pic.twitter.com/ZT6lZbH3p3
— Benny Johnson (@bennyjohnson) May 23, 2025
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Another point of contention earlier this year was the restriction on Nvidia’s GPUs from being sold to China. This contributed to a $2.58 trillion price drop in the conventional tech market, further complicating the crypto scene.
These factors, along with ongoing regulatory and political changes, heavily influence crypto behavior. An industry that is among the largest today experiencing such significant reversals can lead to tumultuous conditions.
Bitcoin and Crypto Market’s Technical Aspects
Everything discussed above aligns seamlessly with the present technical aspects of Bitcoin and the larger market. It’s difficult to pinpoint exactly where the price surge commenced, yet over the past two and a half years, Bitcoin has consistently achieved higher highs.
Recently, Bitcoin recorded a new all-time high but soon after fell short of the $110k mark. From a technical standpoint, this behavior is common within the market, particularly for Bitcoin. Profit-taking is crucial, and it is something everyone ought to engage in.
(Source)
If Bitcoin fails to recapture that region, it may develop a reversed W pattern, potentially driving it down to the $70k level. And we all know that in crypto, anything is possible, often with considerable intensity.
Another pessimistic indicator is the RSI 14. While Bitcoin is registering higher highs, the Relative Strength Index (RSI) is displaying lower highs. This situation can be deceiving, but fundamentally, it indicates a lack of relative strength.
This bearish divergence could lead to short-term to medium-term sell-offs, yet at this point, it appears entirely normal.
On the daily chart, the price continues to respect the 200 SMA and EMA trends. In recent months, Bitcoin has demonstrated considerable fluctuation, resulting in substantial losses or gains for both sides.
Movements from $80k to $110k fall comfortably within Bitcoin’s typical volatility parameters.
That said, this does not imply that we aren’t uptrend about Bitcoin. In the short term, anything could occur, yet we trust Bitcoin will emerge stronger and prepared for another all-time high.
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