Technology
Wednesday, May 1st, 2024 2:26 pm EDT
Key Points
- Bitcoin dropped to its lowest level in over two months, falling by as much as 7% to $56,526.00, marking its lowest point since Feb. 27, according to CoinMetrics.
- The cryptocurrency has been trading within a tight range, with key catalysts like the U.S. exchange-traded fund and the halving now behind it. Its retreat from March all-time highs intensified this week amid broader risk-off sentiment, resulting in a decline of about 10% for the week, making it its worst month since November 2022.
- Investors are closely monitoring the Federal Reserve’s upcoming interest rate decision, expected to conclude its two-day policy meeting on Wednesday afternoon. The central bank is anticipated to maintain steady interest rates, with investors seeking insights from Fed Chair Jerome Powell on potential future rate adjustments. Concerns over deteriorating liquidity measures in the U.S. and the strong U.S. inflation data are impacting assets like cryptocurrency. Additionally, Bitcoin’s decline follows five consecutive days of outflows from U.S. bitcoin ETFs and a lukewarm response to the launch of spot bitcoin ETFs in Hong Kong. Moreover, the drop comes a day after former Binance CEO Changpeng Zhao was sentenced to four months in prison for money laundering charges, further impacting market sentiment.
Bitcoin experienced a notable decline, hitting its lowest level in over two months at $56,526.00, marking a 7% drop from its recent high. This decline, down about 10% for the week, reflects a broader trend of risk aversion in the market, exacerbated by uncertainties surrounding the Federal Reserve’s impending interest rate decision. As investors await the outcome of the Fed’s two-day policy meeting, with expectations of steady interest rates, they are scrutinizing Chair Jerome Powell’s commentary for insights into future monetary policy. Geoff Kendrick of Standard Chartered noted a deteriorating macro backdrop for assets like cryptocurrencies, citing declining liquidity measures in the US and reduced likelihood of Fed rate cuts amidst strong inflation data. Additionally, concerns were raised over consecutive outflows from US bitcoin ETFs and a lukewarm reception to spot bitcoin ETFs in Hong Kong. The dip in bitcoin prices coincides with the sentencing of Changpeng Zhao, former CEO of Binance, to four months in prison on money laundering charges, adding further pressure to the cryptocurrency market.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/05/01/bitcoin-btc-nosedives-below-57000-ahead-of-fed-decision.html
