Bitcoin’s price is now around $66,967, down 4.7% from yesterday’s peak of $71,231. The market is experiencing a significant return to volatility, largely due to this decline.
Expectations for the FOMC meeting of the Federal Reserve
The Bitcoin market seems to be in a risk-off mode ahead of tomorrow’s Federal Open Market Committee (FOMC) meeting on Wednesday, June 12th. The market’s sensitivity to macroeconomic indicators is on full display as stakeholders await the US Federal Reserve’s decision on interest rates and its economic projections.
Markets are bracing themselves for an updated dot-plot which will adopt a hawkish position. It is expected that in 2024, the Fed will reduce the number of rate cuts from three down to two. However, some are speculating on the possibility of just one. Investor behavior is expected to be significantly affected by this hawkish shift in the monetary projections, because higher rates of interest tend to reduce the appeal non-yielding securities like cryptocurrencies.
The May 2024 date adds to the unpredictability. US Consumer Price Index (CPI) data is scheduled for release just hours before the FOMC’s announcement. Markets have reacted heavily to US macroeconomic reports in the past few months. Any deviations could cause significant price swings.
Crypto analyst Ted commented on X, noting the critical nature of this week’s events: “After last Friday’s strong employment data, markets have almost completely priced out a July rate cut. Powell may change his mind on Wednesday, particularly if CPI is weak. There’s an (off) chance for significant repricing this week, which could move BTC + crypto…”
#1 Intensified Selling Pressure
A surge in spot sales appears to have been the immediate cause of recent price drops. Analysis from alpha dōjō reveals The slide to $67,000 was due in large part to the heavy pressure of selling. The dynamics of the market during this time period show a distinct shift. An increased number of sell orders was not matched by enough buy orders in order to maintain price levels. The imbalance in the market has caused a break of what had been considered to be a strong support area around $68,000.
The analysts elaborated on the situation, “Volatility has made a comeback, with BTC dropping as much as 3.5% to a low of $67k since yesterday. This was mostly due to heavy spot selling pressureIt is not a good thing. Lack of liquidations is one major problem. BTC has reached a crucial area. The daily structure is broken. BTC needs to bounce here, or it’s very likely we’ll fall back to the lower $60ks.”
Three-day streak of Bitcoin ETF inflows ending
Spot Bitcoin ETFs also reflect the current bearish trend in the markets. The funds have experienced a dramatic drop after 19 consecutive days with positive inflows. outflows Yesterday, $64.9 million was spent. Grayscale Bitcoin Trust was notable for its outflows, totaling $39.5 Million. BlackRock, on the other hand, saw a smaller increase of $6.3million.
Other ETF providers’ performance showed significant variation. Fidelity reported outflows totaling $3 million while Bitwise recorded inflows worth $7.6 millions. In contrast, Invesco reported an outflow totaling $20.5 Million, while Valkyrie recorded outflows totaling $15.6 million.
BTC is currently trading for $66,967.
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Source: www.newsbtc.com
