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Bitcoin Price Drop Ahead of Federal Reserve Meeting
Bitcoin has experienced a 4% drop in its price over the last 24 hours, currently trading at $64,696, as reported by CoinGecko. Just a few days ago, the cryptocurrency reached a new all-time high of $73,737, surpassing silver’s market cap. The upcoming Federal Reserve meeting tomorrow is expected to address interest rates, which have remained high for the past 23 years, without any anticipated changes.
Since 2022, the Federal Reserve has been gradually increasing interest rates in an attempt to combat the 40-year high inflation rates. This move has led investors to reconsider their investment choices, resulting in a shift towards traditional assets like the dollar. However, despite these actions, Bitcoin, along with other cryptocurrencies and select stocks, has performed impressively due to heightened interest in the tech sector.
Factors Contributing to Bitcoin’s Recent Price Fluctuations
According to James Butterfill, CoinShares’ head of research, the recent dip in Bitcoin’s price is influenced by various factors, including expectations of delayed Federal Reserve interventions and market instabilities caused by sudden drops in Bitcoin prices on exchanges like BitMEX. Additionally, outflows from newly approved exchange-traded funds (ETFs) have had a negative impact, particularly evident in Grayscale, one of the leading crypto funds, experiencing substantial outflows.
Furthermore, the rapid surge in Bitcoin’s price has led to it being deemed “technically overbought,” suggesting an impending correction in value. The combination of inflation concerns and the upcoming halving event indicates a challenging path ahead for Bitcoin in the near future.
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