Analyst: ‘Been Here Before’ – Bitcoin Slumps To $66,000 As FOMC Nerves Hit


Bitcoin
enthusiasts
faced
a
roller
coaster
ride
this
Tuesday
as
the
leading
cryptocurrency
took
a
nearly
5%
tumble,
dipping
below
$68,000.
This
sharp
decline
erased
the
gains
made
during
a
bullish
run
that
saw

BTC
touch
$71,950
just
last
week.
Analysts
are
scrambling
to
decipher
the
reasons
behind
the
sudden
skid
and
predict
Bitcoin’s
next
move,
with
the
highly
anticipated
Federal
Open
Market
Committee
(FOMC)
meeting
looming
large.

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Risk
Aversion
Reigns
As
Investors
Eye
FOMC,
Inflation
Data

The
crypto
market
seems
to
be
mirroring
the
broader
financial
landscape,
where
a
cautious
mood
prevails.
Investors
are
adopting
a
“risk-off”
approach
as
they
brace
for
the
release
of
crucial
economic
data,
including
the
Consumer
Price
Index
(CPI)
and
the

FOMC
meeting.

The
CPI
report,
a
key
inflation
gauge,
is
expected
to
shed
light
on
the
state
of
the
US
economy.
The
FOMC
meeting,
where
the
Federal
Reserve
will
decide
on
interest
rates,
is
another
major
event
that
could
significantly
impact
investor
sentiment.

Bitcoin
is
now
trading
at
$67,573.
Chart:

TradingView

The
upcoming
week
presents
a
perfect
storm
for
riskier
assets
like
Bitcoin.
The
combination
of
potential
interest
rate
hikes
and
inflation
concerns
is
putting
a
damper
on
investor
appetite.
This
risk
aversion
is
likely
translating
into
outflows
from
Bitcoin,
leading
to
the
price
drop
we’re
witnessing.


Dormant
Bitcoin
Wakes
Up,
Adding
Fuel
To
The
Fire

Adding
another
layer
of
intrigue
to
the
price
movement
was
a
large
Bitcoin
transfer
that
occurred
earlier
on
Tuesday.
A
wallet
that
had
been
dormant
for
over
five
years
suddenly
sprang
to
life,
transferring
a
whopping
8,000
BTC,
valued
at
over
half
a
billion
dollars,
to
several
addresses,
including
the
prominent
cryptocurrency
exchange
Binance.
The
sudden
movement
of
such
a
large
amount
of
Bitcoin
could
have
triggered
some
short-term
volatility
in
the
market.

Coinbase Banner  
Source:
Lookonchain


Analysts
Share
Views
On
Bitcoin’s
Post-FOMC
Trajectory

While
the
immediate
future
appears
uncertain,
some
analysts
remain
optimistic
about
Bitcoin’s
long-term
prospects.
Markets
are
“risk-off
mode
ahead
of
CPI
and
FOMC
tomorrow,”
commented
analysts
at
QCP
Capital,
a
global
digital
asset
trading
firm
and
market
maker.

This
sentiment
is
echoed
by
some
crypto
analysts
on
social
media.
Popular
figures
like
Moustache
and
Max
pointed
out
historical
instances
where
FOMC
meetings
coincided
with
price
dips
followed
by
bullish
reversals.


Featured
image
from
Pexels,
chart
from
TradingView

Go to Source
Author: Christian Encila


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