Bitcoin Stocks fell to their lowest levels in more than two months on Wednesday as investors focused on the Federal Reserve’s future interest rate decisions.
The cryptocurrency fell as much as 7% to $56,526.00, its lowest since February 27, according to CoinMetrics. It last traded down about 4% at $57,413.94.
Bitcoin has fallen from its recent highs as risk-off sentiment prevails.It fell about 10% for the week and ended Tuesday.
Investors are closely watching the U.S. Federal Reserve’s future interest rate decisions as it concludes its two-day policy meeting on Wednesday afternoon.The central bank is widely expected to keep interest rates unchanged, according to Federal funds futures price data. Investors are looking to Fed Chairman Jerome Powell for hints about what needs to happen before interest rates are cut.
Bitcoin (BTC) dips below $57,000 for the first time since February
Jeff Kendrick, head of digital asset research at Standard Chartered, said in a note Wednesday that Bitcoin’s drop below $60,000 “reopens the path to the $50,000-$52,000 range. ” he said.
“This driver appears to be a combination of cryptocurrency-specific macros and broader macros,” Kendrick said.
He pointed out that the main factors impacting the token were five consecutive days of outflows from US spot Bitcoin exchange-traded funds, as well as a deteriorating macro environment and deteriorating market liquidity.
Kendrick added that the reaction to the launch of the Bitcoin Spot ETF in Hong Kong earlier this week was “poor”, adding that despite the ETF’s strong net asset position, the ETF’s volume on its first day was The focus was on the fact that the amount was small, in the millions of dollars. .
“Liquidity is important when it matters, of course, but given the strong U.S. inflation numbers and the low likelihood of a Fed rate cut, liquidity is important right now,” Kendrick said in a note.
The drop in prices in the cryptocurrency market also came a day after former Binance CEO Qiao Changpeng was sentenced to four months in prison on money laundering charges.