Bitcoin Price Drops 5% Ahead of FOMC Meeting

Bitcoin’s price slumped nearly 5% on Tuesday, hitting lows of $66,018 as the crypto market turned negative. This decline comes after BTC had reached highs of $71,974 last Friday. According to CoinGecko data, Bitcoin traded nearly 5% down in 24 hours, erasing weekly gains and marking a 6% drop during this period.

Factors Behind Bitcoin’s Decline

The recent dip in Bitcoin’s price can be attributed to several factors:

  • Spot Bitcoin ETFs: The sector recorded outflows of about $65 million on Monday, snapping a 19-day streak of net inflows.
  • Old Bitcoin Wallet Activity: A dormant Bitcoin wallet, inactive for over five years, transferred 8,000 BTC worth more than $535 million to several addresses, including Binance.

Data from Lookonchain indicated that this wallet had received 8,000 BTC on December 6, 2018, when Bitcoin was priced at $3,810.

Market Sentiment and Upcoming Economic Reports

Despite Bitcoin’s price remaining above the psychological $60,000 level, the upcoming FOMC minutes and commentary from Fed Chair Jerome Powell have investors on edge. This ties into the overall macroeconomic environment, including key economic reports expected this week.

“Markets are in risk-off mode ahead of CPI and FOMC tomorrow. This month’s FOMC will also release the Dot Plot, which informs the market how many cuts the Fed anticipates for the rest of 2024,” analysts at QCP Capital noted.

Historical Patterns and Analyst Insights

Although Bitcoin prices could dip further ahead of these macroeconomic reports, some crypto analysts remain optimistic. Pseudonymous analysts Moustache and Max have pointed out that historically, FOMC meetings have been bullish for Bitcoin.

“FOMC tomorrow and $BTC forms a bullish inverse head & shoulders pattern here. The past FOMC meetings have already marked the low of the left shoulder + head. Right shoulder next?” crypto trader Moustache stated.

Max shared a Bitcoin price chart with FOMC meetings mapped on it, noting that the last three meetings coincided with a dip followed by a bullish flip. “We’ve seen this before,” he remarked.

Another crypto analyst, Ali Martinez, also observed that “Bitcoin loves to rebound after every FOMC meeting.”

Stay updated with the latest news and developments in the cryptocurrency market on Global Crypto News.

Post Views: 3