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Bitcoin Market Sees Sell-Off Before FOMC Meeting

Published 01/05/2024, 09:02
Updated 01/05/2024, 09:15
© Reuters Bitcoin Market Sees Sell-Off Before FOMC Meeting
BTC/USD
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  • Bitcoin ETF outflows hit a weekly high of $161 million.
  • Bitcoin price fell below $60,000 due to broader market sell-off.
  • Analysts predict Bitcoin price to go down to $55,000.

The Bitcoin market experienced a wave of selling pressure yesterday, with Bitcoin ETF outflows reaching a weekly high of $162 million. This comes just a day before the highly anticipated FOMC meeting, where the Federal Open Market Committee will discuss potential interest rate hikes. The outflows mark the fifth consecutive day of decline for Bitcoin investment funds, reflecting growing uncertainty in the market.

Grayscale Bitcoin Trust (GBTC), a leading Bitcoin ETF, witnessed a significant single-day outflow of $93.23 million, contributing to its total historical net outflow of $17.3 billion according to Farside Investors data. The total net asset value of all Bitcoin spot ETFs has dipped below $50 billion, currently sitting at $49.413 billion.

April proved to be a challenging month for U.S. Bitcoin ETFs. Following a strong start with inflows during the first quarter of launch, April saw a collective outflow of $182 million across all nine spot Bitcoin ETFs trading in the United States. This decline is attributed to a combination of factors, including the prevailing macroeconomic and geopolitical uncertainties.

Meanwhile, the launch of Bitcoin and Ether ETFs in Hong Kong on April 30th saw a modest start with a $12 million in trading volume on the first day. However, analysts remain optimistic, highlighting that this figure should be evaluated within the context of Hong Kong’s smaller market compared to the U.S.

Adam Back, a prominent figure in the Bitcoin community, pointed out that when adjusted for market size, Hong Kong’s launch day was proportionally more successful than the record-breaking launch of the U.S. Bitcoin ETF.

The broader market sell-off also impacted the Bitcoin price. With the Dow Jones falling 500 points, Bitcoin prices dropped below $60,000. Analysts predict a further correction of 8-10%, pushing Bitcoin down to $55,000 before a potential recovery. The upcoming FOMC meeting and the prevailing market conditions are likely to continue influencing investor sentiment and Bitcoin’s price trajectory in the near future.

The post Bitcoin Market Sees Sell-Off Before FOMC Meeting appeared first on Coin Edition.

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