Is Bitcoin's $80,000 Breakout Fake?...Virtual Assets Evaporate by $2.5 Trillion as Fed Reveals Hawkish Stance

▲ Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), Cryptocurrency decline/AI generated image

The U.S. Federal Reserve's (Fed) hawkish interest rate freeze declaration has sharply dampened investment sentiment for risk assets, causing the total market capitalization of virtual assets to enter a phase where major support levels are threatened.

According to crypto-specialized media BeInCrypto on April 29 (local time), the total market capitalization of virtual assets recorded $2.51 trillion, a 2.38% decrease from the previous day's high. The Federal Open Market Committee voted 8 to 4 to keep interest rates frozen at 3.5% to 3.75%. Three of the four dissenting members argued that the dovish bias should be completely removed, revealing a much stronger hawkish stance than the market anticipated. Unlike the S&P 500 index, which closed flat, the virtual asset market aggressively embraced the asset sell-off trend, showing a decline.

The total market capitalization of virtual assets is facing technical issues compounded by macroeconomic pressure. The $2.63 trillion resistance level has thwarted price increases three times in the last two weeks, revealing a lack of conviction among buyers. A 4.6% rebound is needed to recover to that level from the current price, but this is a difficult task without clear dovish catalysts. If the $2.48 trillion support level breaks, the next downside target opens up to $2.38 trillion.

Bitcoin (BTC) is also showing a stagnant trend within an ascending channel, trading around the $75,956 mark. Since the upper boundary of the ascending channel, formed in early February, pushed prices down on April 22, Bitcoin has failed to find new breakout momentum. Expectations that supported the rally have weakened as Federal Reserve Chairman Jerome Powell signaled there is no urgency for interest rate cuts. For Bitcoin to attempt a significant breakout, it must first recover the Fibonacci 23.6% retracement level of $78,341, and a strong upward conviction is expected to form only after it surpasses the $80,474 mark.

World Liberty Financial (WLFI), linked to the family of former U.S. President Donald Trump, plummeted about 13% to $0.063 with the start of its governance vote. This vote addresses the vesting schedule for 62.28 billion locked tokens, applying a 2-year cliff and 3-year linear distribution for 45.24 billion tokens allocated to the founding team and advisors. Early supporters are granted a 2-year cliff and 2-year distribution schedule for 17.04 billion tokens. Up to 4.52 billion tokens could be burned if insiders agree, but tokens of holders who oppose the new schedule will remain locked indefinitely.

Macroeconomic pressure is further intensifying the sell-off triggered by the governance catalyst. As liquidity first drained from highly speculative tokens ahead of the interest rate meeting, WLFI was pushed down to around $0.061, the bottom of its descending channel. If the $0.061 support level breaks, there is a risk of a further 26% drop, with the price plummeting to $0.044. Conversely, if it successfully finds support in this range, it could reclaim the $0.077 mark, setting the stage to alleviate downward pressure.

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