Bitcoin price dives to $66k ahead of FOMC decision; bullish analyst says “we’ve seen this before”

Bitcoin price fell nearly 5% on Tuesday, falling to $66,000 as the crypto market turned negative ahead of this week’s FOMC meeting.

BTC price fell as low as $66,018 on Coinbase to erase gains seen when it reached $71,974 last Friday.

CoinGecko data showed that Bitcoin was trading down nearly 5% in 24 hours. The flagship cryptocurrency pared its weekly gains and was down 6% at the time of writing.

Why did Bitcoin price fall on Tuesday?

The benchmark cryptocurrency’s struggle this week comes after spot Bitcoin ETFs halted a 19-day streak of net inflows on Monday. Data showed that an outflow of approximately 65 million dollars was recorded in the sector.

Also on Tuesday, a Bitcoin wallet that had been dormant for over 5 years suddenly woke up and transferred 8,000 BTC worth more than $535 million to various addresses, including Binance.

According to Lookonchain, this wallet received 8,000 BTC on December 6, 2018. At that time, the price of Bitcoin was $3,810.

Risk aversion mood ahead of CPI and FOMC

While the price remains well above the psychological $60,000 level, upcoming FOMC minutes and Fed Chairman Jerome Powell’s comments have investors watching carefully.

It is linked to the overall macro environment, including economic reports expected this week, and market experts have signaled that this is a scenario that could be high on the list of factors investors should consider.

“Markets are in risk-off mode ahead of CPI and FOMC tomorrow. This month’s FOMC will also release the Dot Chart, which will tell the market how much cuts the Fed expects for the remainder of 2024,” said analysts at QCP Capital, a global digital asset trading firm and market maker.

Analyst: ‘We’ve seen this before’

Although prices could fall further ahead of these macroeconomic reports and the Fed’s interest rate decision, crypto analysts Moustache and Max say the FOMC has historically been bullish on Bitcoin.

“Tomorrow, FOMC and $BTC are creating an inverse bullish and shoulder formation here. Past FOMC meetings have already marked the left shoulder + lower head. Is the right shoulder next? crypto trader Mustache pointed out to his 123,000 X followers.

Sharing a Bitcoin price chart with FOMC meetings on it, Max states that the last three coincide with a downward trend followed by an upward trend. “We’ve seen this before,” Analyst X shared.

“Bitcoin likes to rally after every FOMC meeting,” said Ali Martinez, another crypto analyst.