Bitcoin Dips Below $66,000 Amid Fed Rate Hike Signals
By John Nada·Feb 18, 2026·5 min read
Bitcoin's drop to $66,000 raises concerns as Fed signals suggest potential rate hikes, impacting both crypto and stock markets.
Bitcoin has plunged to $66,000, marking the potential for its fifth consecutive weekly decline. This drop comes as U.S. stocks also struggle, influenced by hawkish signals from the Federal Reserve's January meeting minutes. The latest downturn in Bitcoin's price has raised alarms among traders and investors alike, as the cryptocurrency's volatility continues to mirror that of traditional markets.
The cryptocurrency experienced a significant slide, trading down 2.5% over the past 24 hours, having reached $68,500 overnight. The decline pressured Bitcoin towards the lower end of its recent trading range, and the $66,000 level, which previously offered support, is now a critical threshold. This level had been pivotal for Bitcoin in the past week, providing a bounce that momentarily lifted the price above $70,000. However, with the recent dip, traders are now watching closely to see if this support can hold.
In conjunction with Bitcoin's fall, related crypto stocks like Coinbase and MicroStrategy also turned negative after initially gaining. Coinbase, for instance, turned its 3% morning advance into a 2% decline by the afternoon, reflecting a broader trend of volatility in crypto-related equities. MicroStrategy, which is known for being the largest corporate holder of Bitcoin, also saw its stock drop by roughly 3%, further illustrating the interconnected nature of these markets.
The broader U.S. stock market, after a promising start, lost momentum as the dollar strengthened, leading to a risk-off sentiment that typically weighs on cryptocurrencies. The recent minutes from the Federal Reserve's Federal Open Market Committee (FOMC) meeting revealed a surprisingly hawkish stance from several members, who suggested that rate hikes might be on the table if inflation remains persistently high. This unexpected shift in tone contributed to increased volatility across the financial markets, as traders adjusted their positions in anticipation of potential rate changes.
As the U.S. dollar strengthened, with the dollar index (DXY) climbing to its strongest level in nearly two weeks, the risk assets, including Bitcoin, faced considerable pressure. A firmer dollar often leads to decreased demand for cryptocurrencies, which are viewed as riskier investments. This dynamic was evident in Wednesday’s market activity, where the crypto fade aligned closely with the dollar's gains. The negative correlation between the dollar's strength and Bitcoin's performance has been a consistent theme in recent months, particularly as economic indicators signal a potential tightening of monetary policy.
If Bitcoin fails to hold the $66,000 support, traders may eye lower levels around $60,000, potentially triggering further market weakness. The possibility of a fresh leg lower underscores the fragility of the current market sentiment. A decisive break below $66,000 could ignite fears of a deeper correction, reminiscent of the prolonged bear market seen in 2022. During that period, Bitcoin faced significant resistance and downward pressure, leading to a dramatic decline in prices over several months.
This current predicament highlights the interconnectedness of crypto and traditional markets, particularly in response to Federal Reserve policy considerations. As the Fed signals a willingness to hike rates, market participants are reevaluating their strategies, often leading to increased volatility in both sectors. The ripple effects of these monetary policy decisions can be felt across asset classes, as investors seek to adjust their portfolios in response to changing economic conditions.
Despite the current challenges, Bitcoin remains a focal point for many investors. The cryptocurrency has seen significant adoption over the years, with institutional interest growing steadily. However, the current environment, characterized by potential rate hikes and a strengthening dollar, poses unique challenges for Bitcoin and its holders. Traders are left contemplating the implications of central bank policies on their investments, and how these shifts will influence Bitcoin's trajectory in the coming weeks and months.
As we navigate these turbulent waters, the market will continue to react to economic data releases, inflation reports, and any further guidance from the Federal Reserve. Investors are keenly aware that shifts in monetary policy can have immediate effects on market sentiment, often leading to rapid price fluctuations. This heightened sensitivity to macroeconomic factors illustrates the ongoing maturation of the cryptocurrency market and its increasing integration with broader financial systems.
In the meantime, other crypto-related stocks have shown some resilience, with companies like Circle, Galaxy, IREN, and Riot leading the early morning rebound among crypto stocks as the battered software sector found some relief. However, the overall performance of these stocks remains tightly correlated with Bitcoin's price movements, further solidifying the notion that the fortunes of the crypto market are inextricably linked to its leading asset. As Bitcoin continues to grapple with its current price levels, the performance of these companies will likely mirror the sentiment in the cryptocurrency market.
In the context of this ongoing volatility, investors are urged to remain vigilant and informed about the market dynamics at play. The interplay between Bitcoin's price, the Federal Reserve's monetary policy, and broader economic indicators will continue to shape the landscape for cryptocurrencies and traditional equities alike. The current climate presents both risks and opportunities, and astute market participants will be those who can navigate these challenges effectively.
As we look ahead, the coming weeks will be crucial for Bitcoin and the cryptocurrency market as a whole. The potential for further declines remains, but so does the opportunity for recovery should the market find its footing. The $66,000 support level serves as a critical juncture; its fate will likely influence not only Bitcoin's price but also the broader sentiment in the crypto and stock markets. Traders and investors alike are poised to react as the situation unfolds, with eyes firmly fixed on economic indicators and Federal Reserve communications that will undoubtedly shape the market's direction going forward.