Bitcoin
Bitcoin (BTC) Falls to $57,000 Ahead of Fed Decision
The Bitcoin (BTC) cryptocurrency logo can be seen on a coin in front of a Bitcoin graphic.
Silas Stein | Image alliance | Getty Images
Bitcoin fell to the lowest level since early May in more than two months as investors kept an eye on the Federal Reserve’s next interest rate decision.
The cryptocurrency fell as much as 7% to $56,526.00, its lowest level since February 27, according to CoinMetrics. The latest drop was about 4% to $57,413.94.
Bitcoin has been trading in a tight range, with the main catalysts for the cryptocurrency – the US exchange-traded fund and the halving – now behind it. Your retreat from March all-time highs intensified this week amid broader risk-on sentiment. It fell around 10% for the week and on Tuesday it recorded its worst month since November 2022.
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Bitcoin (BTC) drops below $57,000 for the first time since February
Investors are focused on the Federal Reserve’s next interest rate decision, which will conclude its two-day monetary policy meeting on Wednesday afternoon. The central bank is expected to keep interest rates stable, according to federal funds futures price data. Investors look to Fed Chairman Jerome Powell for clues on what needs to happen before rates can fall.
Geoff Kendrick, head of digital asset research at Standard Chartered, said in a note on Wednesday that Bitcoin’s fall below $60,000 “has now reopened a route to the 50-52,000 range.”
“The driver appears to be a combination of specific cryptography and broader macro,” Kendrick said.
He noted that the main factors impacting the token were five days of consecutive outflows from US spot bitcoin exchange-traded funds, as well as a deterioration in the macro scenario and worsening market liquidity.
Kendrick added that the reaction to launch of spot bitcoin ETFs in Hong Kong earlier this week was “weak,” focusing on ETFs’ small first-day turnover in the millions of dollars, despite ETFs’ net asset positions being solid.
“Of course, liquidity matters when it matters, but against a backdrop of strong U.S. inflation data and a lower likelihood of Fed rate cuts, it matters right now,” Kendrick said in the note.
The downward price action in crypto markets also comes a day after former Binance CEO Changpeng Zhao was sentenced to four months in prison on money laundering charges.