Analyst predicts Bitcoin price drop to 66k before FOMC announcement
The price of Bitcoin took a nearly 5% hit on Tuesday, dropping to a low of $66k as the cryptocurrency market turned bearish ahead of this week’s FOMC meeting. On Coinbase, BTC plummeted to $66,018, erasing gains made when it reached a high of $71,974 last Friday. Data from CoinGecko indicated that Bitcoin had fallen by almost 5% in a 24-hour period, with the flagship cryptocurrency reducing weekly gains by 6% at the time of writing.
The struggles faced by Bitcoin this week can be attributed to spot Bitcoin ETFs experiencing outflows of around $65 million on Monday, breaking a 19-day streak of net inflows. Additionally, a Bitcoin wallet that had been inactive for over 5 years suddenly came to life on Tuesday, transferring 8,000 BTC valued at over $535 million to various addresses, including Binance.
The current risk-off sentiment is linked to the upcoming release of CPI and FOMC minutes, as investors eagerly await Fed Chair Jerome Powell’s commentary. Market experts are closely monitoring the macroeconomic environment, economic reports expected this week, and the Dot Plot release during this month’s FOMC meeting, which will reveal the Fed’s anticipated cuts for the remainder of 2024.
Despite the potential for further price dips before the macroeconomic reports and Fed’s interest rate decision, analysts Moustache and Max believe that historically, FOMC meetings have been bullish for Bitcoin. Moustache pointed out a bullish inverse head & shoulders pattern forming in BTC’s price chart, noting that previous FOMC meetings have marked the low points before a bullish turnaround. Max shared a chart showing how the last three FOMC meetings led to a temporary dip followed by a bullish reversal, emphasizing that this pattern has been observed before. Another crypto analyst, Ali Martinez, echoed this sentiment, highlighting Bitcoin’s tendency to rebound after every FOMC meeting.
