Bitcoin price plunges to 66k prior to FOMC announcement optimistic analyst notes familiarity with situation
Bitcoin experienced a significant drop of nearly 5% on Tuesday, reaching a low of $66k as the cryptocurrency market took a negative turn ahead of the upcoming FOMC meeting this week. The price of BTC plummeted to $66,018 on Coinbase, erasing the gains made when prices hit highs of $71,974 just last Friday. Data from CoinGecko indicated that Bitcoin was trading almost 5% lower within a 24-hour period. The primary cryptocurrency has seen a decrease of 6% in weekly gains at the time of this writing.
The struggles faced by Bitcoin this week can be attributed to the halt in net inflows for spot Bitcoin ETFs on Monday, breaking a streak of 19 days. Approximately $65 million worth of outflows were recorded in this sector. Additionally, a Bitcoin wallet that had been inactive for over 5 years suddenly became active on Tuesday, transferring 8,000 BTC valued at more than $535 million to various addresses, including Binance. According to Lookonchain, this wallet received 8,000 BTC on December 6, 2018, when the price of Bitcoin was $3,810.
As the price of Bitcoin remains above the crucial $60,000 mark, investors are closely monitoring the upcoming FOMC minutes and the comments from Fed Chair Jerome Powell. This is in line with the general macroeconomic environment, which includes expected economic reports for the week. Market experts have highlighted this as a key factor for investors to consider.
QCP Capital, a prominent global digital asset trading firm and market maker, stated, “Markets are in a risk-off mode ahead of CPI and FOMC tomorrow. This month’s FOMC will release the Dot Plot, indicating the number of cuts the Fed foresees for the remainder of 2024.”
Despite the possibility of further price drops leading up to these macroeconomic events and the Fed’s interest rate decision, renowned 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 with FOMC on the horizon. Max shared a Bitcoin price chart with FOMC meetings marked, showing a pattern of dips followed by bullish reversals. Another crypto analyst, Ali Martinez, mentioned, “Bitcoin tends to bounce back after every FOMC meeting.”
