Bitcoin (BTC) experienced a significant drop, falling to $56,556 during Wednesday morning in Europe, marking the lowest point since late February. This decline represents the sharpest monthly drop since November 2022, with BTC tumbling approximately 7.5% within the last 24 hours and breaking the previously stable $60,000 support late Tuesday.
Anticipation and anxiety are high in financial circles as the Federal Open Market Committee (FOMC) is set to announce its interest rate decision later today. This event is crucial as the crypto market, notably Bitcoin, has become increasingly reactive to macroeconomic signals.
Recent data reflecting a slowdown in GDP growth and persistent inflation has significantly reduced expectations of interest rate cuts by the Federal Reserve. This shift comes amidst an environment where inflation data is trending upwards, challenging the Federal Reserve’s position and potentially leading to a more cautious approach from Fed Chairman Jerome Powell.
Following an exceptional rally since the start of the year, the market is now undergoing a natural correction phase. Technical indicators suggested an impending correction, with Scott Melker noting that Bitcoin had not experienced a significant pullback during this bull market.
Traditional finance markets and seasoned investors are taking profits following substantial gains. This trend confirms a broader profit-taking strategy post significant events like the ETF approval and the Bitcoin halving.
The dynamics surrounding spot Bitcoin ETFs have shown significant strains, with both US and Hong Kong markets experiencing outflows and underperforming expectations. Long liquidations have also had a significant impact on the market, with a total of $451.28 million liquidated in the last 24 hours alone. The recent liquidations have increased the selling pressure on Bitcoin, with BTC currently trading at $57,715. The chart shows the price movement over a 1-day period. Please note that this article is for educational purposes only and does not reflect the views of NewsBTC on investment decisions. Remember to conduct your own research before investing as all investments carry risks. Use the information provided here at your own discretion.