Bitcoin Dips to $66K Ahead of FOMC Meeting While Analysts Forecast Potential Bullish Bounce

On Tuesday, the Bitcoin price experienced a nearly 5% slump, reaching a low of $66k as the crypto market turned bearish ahead of this week's FOMC meeting. BTC dropped to $66,018, erasing gains from last Friday's peak of $71,974. 

Source: gazeteoksijen.com

Data indicates that Bitcoin traded nearly 5% lower within a 24-hour period. The leading cryptocurrency has diminished its weekly gains, currently down 6% during this timeframe.

Bitcoin’s Price Declined on Tuesday Due to Bearish Market Sentiment

Bitcoin faced challenges as spot Bitcoin ETFs ended a 19-day streak of net inflows on Monday, experiencing outflows of approximately $65 million. Additionally, on Tuesday, a dormant Bitcoin wallet, inactive for over five years, suddenly transferred 8,000 BTC valued at over $535 million to various addresses, including exchanges. According to Lookonchain, this wallet received 8,000 BTC on December 6, 2018, when the price of Bitcoin was $3,810.

Risk Aversion Prevails Ahead of CPI and FOMC

Investors are closely monitoring the upcoming FOMC minutes and Fed Chair Jerome Powell's commentary, as they tie into the broader macroeconomic landscape and economic reports anticipated this week. Market experts emphasize this scenario as a significant factor for investors to consider, with markets exhibiting a risk-off mode ahead of the CPI and FOMC. Additionally, this month's FOMC will release the Dot Plot, indicating the Fed's anticipated rate cuts for the remainder of 2024, further influencing market sentiment and direction.

Analyst Remarks This Scenario Is Familiar

Despite the possibility of further price declines ahead of macroeconomic reports and the Fed's interest rate decision, pseudonymous crypto analysts Moustache and Max suggest that historically, the FOMC has been bullish for Bitcoin. Moustache, who was addressing his 123,000 followers, points out a bullish inverse head and shoulders pattern forming in Bitcoin's price ahead of the FOMC meeting. He notes that previous FOMC meetings have marked the low points of similar patterns, suggesting the potential for a bullish reversal. Similarly, Max shares a Bitcoin price chart with FOMC meetings marked on it, highlighting that the last three instances coincided with a dip followed by a bullish trend reversal. “We've seen this before”, Max emphasizes. Echoing these sentiments, crypto analyst Ali Martinez observes that Bitcoin tends to rebound after every FOMC meeting.

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