Dive into the latest insights on Bitcoin’s recent price movement as it slid to its lowest level in more than two months in early May, all while investors keep a close watch on the Federal Reserve’s upcoming interest rate decision.
Bitcoin, the leading cryptocurrency, saw a decline of as much as 7% to $56,526.00, marking its lowest level since February 27, according to data from CoinMetrics. Currently, it is hovering around $57,037.42, down about 4.5%.
This recent drop in Bitcoin’s price comes as the cryptocurrency has been trading in a relatively narrow range following key events such as the release of U.S. exchange-traded funds and the halving. With these major catalysts now in the rearview, Bitcoin saw a retreat from its all-time highs in March, further exacerbated by a broader risk-off sentiment. The digital currency is down approximately 10% for the week, making it the worst month since November 2022.
Many investors are closely monitoring the Federal Reserve’s upcoming interest rate decision scheduled at the conclusion of a two-day policy meeting on Wednesday afternoon. The central bank is anticipated to keep interest rates steady, according to fed funds futures pricing data. Analysts are eager for insights from Fed Chair Jerome Powell on the conditions required for potential rate adjustments.
Geoff Kendrick, the head of digital asset research at Standard Chartered, highlighted the deteriorating macro backdrop impacting assets like cryptocurrencies that heavily rely on liquidity. Kendrick emphasized the importance of liquidity in the current environment, particularly amidst robust U.S. inflation data and diminished expectations for Fed rate cuts.
Additionally, Kendrick pointed out the consecutive outflows from U.S. bitcoin ETFs over five days and the lackluster response to the launch of spot bitcoin ETFs in Hong Kong this week. The recent drop in Bitcoin’s price also coincided with news of the former CEO of Binance, Changpeng Zhao, receiving a four-month prison sentence for money laundering charges.
Despite the current market conditions, Bitcoin investors remain optimistic about a potential recovery later this year. However, given the existing macroeconomic and geopolitical pressures, analysts suggest a period of price consolidation for Bitcoin over the next 1-2 months, with fluctuations of up to $10,000 on either side. They anticipate the positive impacts of the halving to become more evident in the months ahead.
Stay tuned for more updates and insights on the crypto market as Extreme Investor Network continues to provide valuable information to help you navigate the ever-evolving world of finance.