Bitcoin Tests $60,000 Support Amidst Uncertainty Over Fed's Interest Rate Decision
The cryptocurrency market witnessed significant liquidations totalling approximately $670 million as traders awaited guidance from the Federal Open Market Committee (FOMC) meeting. With the Fed likely to maintain interest rates unchanged, investors were cautious, leading to a sharp downturn in Bitcoin (BTC) and altcoin prices.
Bitcoin tested the $60,000 support level, experiencing a 6% decline, while Ethereum (ETH) fell 8% to test $3,000. Altcoins also faced a deeper correction, with widespread losses observed across the market. The liquidation event, totalling $670 million, impacted both long and short positions, reflecting heightened market volatility.
Analysts at K33 Research warned of continued downside volatility stemming from long liquidations, signalling potential obstacles to a swift market recovery. Despite the bearish sentiment, major players like Microstrategy continued to accumulate Bitcoin, indicating confidence in the long-term prospects of the asset.
Looking ahead to the FOMC meeting, expectations were for the Fed to focus on addressing persistent inflation rates and monitoring unemployment figures, rather than indicating an immediate rate cut. This anticipation, coupled with decreasing inflows into Bitcoin ETFs and concerns about interest rate cuts in the United States, contributed to subdued market sentiment.
Bitcoin's price action faced challenges in maintaining levels above $60,000, with market observers closely monitoring key support levels. Traders and analysts highlighted the significance of the upcoming FOMC decision in alleviating pressure on oversold crypto assets, potentially leading to a relief bounce.
As Bitcoin approached critical support levels, traders remained cautious, anticipating further downside if the $60,000 support was breached. The outcome of the FOMC meeting and its impact on risk assets would likely influence Bitcoin's short-term price trajectory.
In summary, the cryptocurrency market experienced significant liquidations amid uncertainty surrounding the FOMC meeting, with Bitcoin facing challenges in maintaining key support levels. Traders awaited further guidance from the Fed to assess the market's direction in the coming days.
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