Bitcoin price erased all of its gains from this week as it crashed to a critical support level amid hotter-than-expected PPI data and Jerome Powell’s Federal Reserve speech that cast a shadow over any interest rate cuts for this year.

According to data from crypto.news, Bitcoin (BTC) price fell over 5% from its Wednesday high of $74,700 to an intraday low of around $70,660 on Thursday, March 19. The leading cryptocurrency was hovering at $70,879, down 27% from its year-to-date high of $97,538.

The global crypto market tanked alongside Bitcoin to $2.51 trillion, down 3.8% over the day, as major crypto assets such as Ethereum (ETH), XRP (XRP), Solana (SOL), and Dogecoin (DOGE) mirrored Bitcoin’s move.

Bitcoin price fell as fresh macroeconomic concerns lowered risk appetite among investors. This followed after the U.S. PPI data came in hotter than expected for February, with core PPI rising to 3.9% while headline PPI surged to 3.4%, beating market estimates of 3.0%.

A hotter reading typically signals that wholesale inflation is not cooling as fast as hoped, which could lead to higher consumer prices.

The inflation data hit sentiment harder as investors were already cautious ahead of Powell’s speech scheduled for later that day. Odds of a rate cut fell sharply, with markets pricing in a near certainty of a pause ahead of the FOMC meeting.

The Federal Reserve speech struck another blow to the market as Powell reiterated that the Fed would continue to hold interest rates steady while maintaining a strictly data-dependent approach. He attributed this to rising energy prices resulting from Middle East tensions, which have kept inflation elevated, with headline PCE around 2.8% and core inflation near 3.0%, both remaining above the Fed’s 2% target.

While the market had already expected a pause, the recent back-to-back hawkish signals rattled investors who pulled back in fear of further delays in monetary easing.

Meanwhile, the sharp drop in Bitcoin’s price triggered a liquidation cascade across leveraged markets as long positions were caught off guard. Data from CoinGlass shows that the total crypto market faced $455 million in liquidations, with $382 million liquidated from long positions. Bitcoin alone accounted for over $150 million of the total wipeout.

Will Bitcoin price stage a recovery?

Bitcoin price fell close to the $70,000 support, a level analysts have identified as a key psychological and technical floor.

Several positive signals from technical indicators seem to point to a potential rebound that could be underway. Notably, the Supertrend indicator has flashed green. When this metric shows a green signal, it means the overall trend has shifted from bearish to bullish, often acting as a buy signal for momentum traders.

At the same time, the MACD, which measures the relationship between two moving averages of a security’s price, also pointed upwards, suggesting that the downward pressure is exhausting and a bullish crossover may be imminent.

For now, the immediate resistance to keep an eye on lies at $72,540, the upper boundary of the Supertrend. A break above it could push Bitcoin price to above $74,500, a level that aligns with the 38.2% Fibonacci retracement level.

On the contrary, if Bitcoin falls below the $70,000 support, a revisit to $65,000 and subsequently to $60,000 becomes a distinct possibility as the next major liquidity zones.