Bitcoin dropped below the $76,000 mark this week as the U.S. Federal Reserve implemented a 25 basis point interest rate increase, elevating benchmark rates to the 3.75-4% range. The adjustment represents the Fed's first rate hike since July 2023, concluding a three-year period of accommodative monetary policy.
Following the initial decline, Bitcoin recovered some losses, showing a 0.5% gain at the time of reporting. The BTC/USD pair had touched fresh monthly lows on Tuesday before staging a recovery, with trading data indicating declining price volatility throughout the 24-hour period.
Traditional U.S. stock markets demonstrated resilience despite the monetary tightening. The S&P 500 posted a 0.9% increase while the Nasdaq Composite Index surged 1.5%.
Bull Score Index Reaches Critical Threshold
CryptoQuant's Bull Score Index, a metric designed to monitor Bitcoin price cycles, fell from 80 to 60. According to the platform's methodology, 60 represents the minimum threshold for maintaining a bullish market classification.
Julio Moreno, CryptoQuant's head of research, assessed the situation in a weekly analysis: "The trend is still bullish, but momentum and macro are working against it near-term." Moreno identified weakening U.S. Bitcoin demand and increasing altcoin capital flows as near-term obstacles to price gains.
Support Levels Under Watch
Analysis identified two important support areas for market participants: $70,000 and the broader $62,000-$65,000 zone. Moreno concluded that while the Bull Score of 60 keeps the trend bullish, "fading U.S. demand, rising altcoin inflows, and a week of macro risk argue for consolidation."
Bitcoin's August surge had registered a 25% gain prior to entering the current consolidation phase. Other major central banks have joined the tightening trend, with the European Central Bank implementing a 0.25% rate increase the previous week and the Bank of Japan anticipated to announce its own rate hike.
