The price of Bitcoin experienced a nearly 5% drop on Tuesday, reaching a low of $66k as the cryptocurrency market turned negative ahead of this week’s FOMC meeting. On Coinbase, BTC price fell to $66,018, erasing gains that had been made when prices hit highs of $71,974 last Friday. CoinGecko data indicated that Bitcoin had traded down by almost 5% in the span of 24 hours. The leading cryptocurrency had shed 6% of its value for the week at the time of writing.
The struggles faced by Bitcoin this week can be attributed to spot Bitcoin ETFs ending a 19-day streak of net inflows on Monday, with the sector experiencing outflows of around $65 million. In addition, a Bitcoin wallet that had been inactive for over 5 years suddenly became active on Tuesday, transferring 8,000 BTC valued at over $535 million to various addresses, including Binance. According to Lookonchain, this wallet had received 8,000 BTC back on December 6, 2018, when the price of Bitcoin was $3,810.
Despite Bitcoin remaining above the key $60,000 level, investors are closely monitoring the upcoming FOMC minutes and remarks from Fed Chair Jerome Powell. The focus is on the broader macroeconomic environment, which includes economic reports due this week. Market experts believe that these factors will play a significant role in investors’ decision-making.
“Markets are currently in a risk-off mode ahead of CPI and FOMC tomorrow. This month’s FOMC meeting will also unveil the Dot Plot, indicating the number of cuts the Fed is anticipating for the remainder of 2024,” stated analysts at QCP Capital, a global digital asset trading firm.
While prices may see further declines leading up to the macroeconomic reports and the Fed’s interest rate decision, crypto analysts Moustache and Max believe that historically, FOMC meetings have been bullish for Bitcoin. Moustache, addressing his 123,000 followers, pointed out a bullish inverse head & shoulders pattern forming in BTC ahead of the FOMC meeting. Max shared a Bitcoin price chart indicating that the last three FOMC meetings had resulted in a dip followed by a bullish reversal. “We’ve seen this before,” the analyst stated.
“Bitcoin tends to rebound after every FOMC meeting,” noted another crypto analyst, Ali Martinez.