Bitcoin Sinks Below $58K in Run-Up to Fed Decision

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Bitcoin (BTC) fell below $58,000 on Wednesday morning in Europe, falling to its lowest level since the end of February. BTC is down nearly 6% in the last 24 hours, falling below the $60,000 support level late Tuesday. The broader crypto market, as measured by the CoinDesk 20 Index (CD20), lost more than 5%. Cryptocurrencies are being tracked by risk aversion in broader financial markets amid stagflation sentiment in the US following slow growth and sticky inflation indicators that dampen hopes of a Federal Reserve rate cut. The Federal Open Market Committee is expected to announce its final interest rate decision later today.

Binance founder Changpeng “CZ” Zhao was sentenced to four months in federal prison on Tuesday after pleading guilty to charges of enabling money laundering at the crypto exchange. The relatively light sentence (prosecutors had sought three years in prison) may be attributable to the positive image defense attorneys created of the man as a philanthropist, family man and first-time lawbreaker. US Magistrate Richard Jones said he did not think he had ever seen “a volume of letters” to a defendant from friends or family, so the book containing those letters was literally falling apart.

SEC Chairman Gary Gensler was accused of misleading Congress by Rep. Patrick McHenry, chairman of the House Financial Services Committee. McHenry said he knew before attending the hearing that Gensler’s agency considered Ethereum ether a security, and he refused to answer that question. “Chairman Gensler has refused to answer questions regarding the SEC’s classification of ether,” McHenry said in a statement published on X on Tuesday. “New court records show this was a deliberate attempt to misrepresent the commission’s position.” The classification of ETH is a major question hanging over US oversight of digital assets. If ETH is a security that must be registered and regulated by the SEC, many other tokens may also fit this definition.

Painting of the Day

(Standard Leased)

The chart shows that BTC price is currently below the average ETF buying level.

This means that more than half of spot ETF positions are underwater and the risk of liquidation must be considered.

Therefore, a break below $60,000 reopens the route to the $50,000-52,000 range.

Source: Standard Chartered

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