Bitcoin‘s BTC/USD price took a tumble on Tuesday, raising questions about the cause of the sudden drop and its future trajectory.
What Happened: While some analysts are calling it a “scam dump,” others see it as a potential buying opportunity ahead of a key week for the markets.
Data from TradingView recorded a 4% drop, with Bitcoin hitting lows of $66,732 on Bitstamp.
This decline comes as no surprise to some market watchers who see a familiar pattern.
Crypto analyst Gumshoe noted, “This is a scam dump. There have been 4 FOMC’s in 2024, and every single one of them had the same scam dump. BTC dumped 10% in the 48 hours before all of them. On FOMC day, it recovered the entire move.”
Supporting this observation, Jelle, another prominent crypto analyst, highlighted the positive aftermath of Federal Reserve meetings.
“Powell’s press conferences have been good for the market recently. In fact, the past 4 FOMC events have all coincided with local bottoms and >20% rallies for Bitcoin. With the next presser taking place on Thursday, a bounce could be closer than most people think,” he tweeted.
Also Read: Bitcoin Peak of $120,000 By Late 2024, Major Alt Season To Follow: Bitfinex
Why It Matters: The market sentiment is further compounded by the upcoming release of crucial U.S. economic data, including the Consumer Price Index (CPI) and Producer Price Index (PPI), along with the Federal Reserve's latest interest rate decision.
Michaël van de Poppe, CIO and Founder of MN Trading, said, “It's a big week for the markets, as tomorrow the markets will receive the new CPI data & interest rate decisions from the FOMC. Bitcoin and crypto almost always correct before the event and return upwards after. In the previous months, the same price action took place.”
This repetitive price action pattern suggests that Bitcoin’s recent downturn could be temporary, driven by market participants pricing in overly bearish statements ahead of the Federal Open Market Committee (FOMC) meetings.
Analysts believe that once these events conclude, the market often sees a reversal, leading to significant recoveries.
Adding to the bearish sentiment, June 10 saw the first net outflow of Bitcoin spot ETFs after 19 consecutive days of net inflows, totaling $64.9318 million.
Notably, Grayscale ETF GBTC experienced a significant single-day outflow of $39.5366 million.
However, Bitwise ETF BITB and BlackRock ETF IBIT had inflows of $7.5910 million and $6.3433 million, respectively, indicating varied investor sentiment across different funds.
What’s Next: These dynamics are expected to be a key topic at Benzinga’s Future of Digital Assets event on Nov. 19.
The event will provide a platform for industry leaders to discuss market trends, regulatory impacts, and future predictions for digital assets.
Attendees will gain valuable insights into the factors influencing market movements and the potential trajectory of Bitcoin and other cryptocurrencies.
Read Next: Can Bitcoin Reach $83,000? Key Factors Needed For A Breakout: 10x Research
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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