On March 20, Bitcoin faced the possibility of dropping below $61,000 as experts cautioned that support levels might be on the verge of breaking.
According to data from Cointelegraph Markets Pro and TradingView, Bitcoin’s price experienced further declines, reaching a low of $60,760 on Bitstamp.
Currently, Bitcoin has fallen 17.5% from its peak, contending with selling pressure due to several significant challenges.
Reports have highlighted factors such as withdrawals from the U.S.’s spot Bitcoin exchange-traded funds (ETFs) and the Federal Reserve’s decision on interest rates on March 20 as key contributors to the downward pressure on Bitcoin’s value.
Although the outcome of the Federal Open Market Committee (FOMC) meeting seems predictable, much attention is focused on Fed Chair Jerome Powell’s remarks for clues on the future of risk assets.
The Kobeissi Letter, a trading analysis source, remarked on the situation via X (formerly Twitter), stating, “With the Fed meeting less than 24 hours away, it’s unlikely the Fed changes rates tomorrow.
“However, all eyes will be on guidance after the recent events. We maintain the view that it is far too soon to pivot.”
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“Current projections from CME Group’s FedWatch Tool indicate only a 1% probability of a policy shift at the March 20 meeting, with a slight increase to 9.1% for the subsequent meeting in May.
“The situation is further complicated by consecutive days of net outflows from spot Bitcoin ETFs, according to data from the UK-based investment firm Farside.
Despite the outflows from the Grayscale Bitcoin Trust (GBTC) being less than the record $642 million on March 19, the reduced inflows to other ETF products resulted in underwhelming overall statistics.
Financial commentator Tedtalksmacro noted, “Almost $500M USD has flowed out of spot BTC ETFs in the past two trading days,” attributing the slowdown to traders’ cautious stance ahead of the FOMC meeting and the impact of tax season in the U.S.
He suggested, “Regular programming will resume, but some chop first.”
QCP Capital, in its daily bulletin to Telegram subscribers, pointed out the potential significant impact of the second consecutive day of net outflows on Bitcoin’s price stability, raising concerns over the ability of inflows to other ETFs to counterbalance the outflows and questioning whether this could lead to a net positive outcome.
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