Bitcoin price suffered a nearly 5% drop on Tuesday, falling to lows of $66k amidst a negative turn in the overall crypto market ahead of the Federal Open Market Committee (FOMC) meeting. The leading cryptocurrency, BTC, plummeted to $66,018 on Coinbase, erasing gains made when prices hit highs of $71,974 just last Friday. Data from CoinGecko indicated a nearly 5% decline in Bitcoin trading within 24 hours, with the digital asset also facing a 6% dip in weekly gains. This recent price struggle for Bitcoin comes as spot Bitcoin ETFs experienced outflows of approximately $65 million on Monday, breaking a 19-day streak of net inflows.
Adding further pressure to Bitcoin’s price, a dormant wallet that had been inactive for over five years suddenly woke up on Tuesday and transferred 8,000 BTC, valued at over $535 million, to various addresses including Binance. This wallet had originally received the 8,000 BTC back in December 2018 when Bitcoin was priced at $3,810, highlighting the massive appreciation in value over the years. Despite these setbacks, the price of Bitcoin remains above the key psychological level of $60,000, with investors closely monitoring the FOMC meeting and Fed Chair Jerome Powell’s comments for potential market impact.
As the cryptocurrency market grapples with a risk-off sentiment ahead of key economic reports and the FOMC meeting, market experts emphasize the significance of these events for investors. With the FOMC set to release the Dot Plot, indicating the Fed’s potential interest rate cuts for the remainder of 2024, analysts anticipate heightened volatility in the market. QCP Capital, a global digital asset trading firm, notes that investors are currently in a risk-off mode, preparing for the impact of the FOMC minutes and Powell’s statements on the market trends and potential rate adjustments.
Notably, despite the current downturn in Bitcoin’s price, analysts remain optimistic about the cryptocurrency’s future performance post-FOMC meeting. Pseudonymous crypto analysts such as Moustache and Max highlight historical trends where Bitcoin has shown bullish patterns following previous FOMC gatherings. Moustache points out a potential bullish inverse head and shoulders pattern forming in Bitcoin’s price chart, suggesting a positive trend post-FOMC. In a similar vein, Max shares a chart illustrating previous FOMC meetings coinciding with bearish dips followed by bullish reversals, indicating a possible repeat pattern in Bitcoin’s price behavior.
In conclusion, while Bitcoin faces short-term challenges such as price fluctuations and market uncertainties, analysts and traders remain positive regarding its long-term prospects. The upcoming FOMC meeting, along with other macroeconomic factors, will likely influence Bitcoin’s price trajectory in the near future. As investors navigate through market volatility, historical trends and expert analysis provide valuable insights into potential investment opportunities and market trends. Ultimately, staying informed and attentive to key market events will be crucial for navigating the ever-evolving landscape of cryptocurrencies like Bitcoin.
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