Bitcoin (BTC) experienced a significant drop below the $57,000 mark early Wednesday, continuing its downward trend amid widespread market losses. This decline was mirrored across other leading cryptocurrencies, with Ethereum (ETH), Dogecoin (DOGE), and Solana (SOL) also seeing sharp declines. The Market Fear & Greed Index plummeted to a fearful 34 out of 100, highlighting the prevailing anxiety among investors.

The primary catalyst for this market turmoil is the U.S. Department of Justice’s (DOJ) recent escalation in its antitrust investigation into Nvidia. This move has introduced a wave of uncertainty across both stock and cryptocurrency markets. The investigation aims to determine if Nvidia’s dominance in the AI chip market has unfairly restricted competition. Subpoenas have been issued, marking a significant escalation from prior inquiries and questionnaires. There are allegations that Nvidia may be penalizing customers who opt for AI chips from other suppliers. This probe comes at a challenging time for Nvidia, which has already seen its stock plummet following a disappointing quarterly forecast and faces additional regulatory scrutiny from other countries.

Amid this backdrop, Bitcoin briefly dipped to $55,673 before staging a minor rebound. However, broader market concerns, exacerbated by weak ISM Manufacturing PMI data, continue to weigh heavily on Bitcoin’s price. Investors are now eagerly awaiting forthcoming U.S. economic reports that could influence Federal Reserve interest rate decisions.

As of the latest update, the global cryptocurrency market cap stood at $1.98 trillion, reflecting a 24-hour decline of 4.13%. The interconnected nature of technology and financial markets is evident, as regulatory developments involving major companies like Nvidia can significantly sway broader investor sentiment.

In terms of technical analysis, Bitcoin (BTC/USD) is trading within a descending channel on the 4-hour chart, indicating a bearish outlook in the near term. The price faced rejection at the upper boundary of the channel near $58,000, which aligns with the 50-period EMA at $58,800, reinforcing selling pressure. The next significant support level is at $55,600, with a critical support zone around $55,000. A break below this level could drive Bitcoin toward the $52,100 mark. On the upside, Bitcoin needs to break above the descending channel and the resistance at $58,000 to shift towards a more bullish tone. The Relative Strength Index (RSI) is near 44, showing bearish momentum with potential for further downside unless a reversal occurs soon.

In summary, Bitcoin is likely to remain bearish unless it breaks above $58,000, with immediate support around $55,600 and further downside risk if it breaks below $55,000.

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