TLDR
- Bitcoin and other cryptocurrencies experienced a significant pullback, with BTC dipping to near $66,000.
- The crypto market decline is attributed to investors “de-risking” ahead of the May Consumer Price Index (CPI) report and the Federal Reserve (Fed) meeting on Wednesday, June 12.
- Historical data shows that Bitcoin tends to drop in value before FOMC meetings and rally post-announcement.
- The upcoming FOMC meeting and CPI report are expected to cause volatility in the crypto market, with some analysts predicting a potential rebound in Bitcoin’s price post-announcement.
- Bitcoin’s open interest in futures markets has surged to new heights, indicating increased trading activity and potential price surges.
The cryptocurrency market experienced a sharp correction on Tuesday, with Bitcoin (BTC) leading the decline by dipping to a three-week low of $66,170.
The pullback, which triggered over $250 million in liquidations of leveraged derivatives trading positions across all crypto assets, is attributed to investors “de-risking” ahead of the crucial May Consumer Price Index (CPI) report and the Federal Reserve (Fed) meeting scheduled for Wednesday, June 12.
Historical data suggests that Bitcoin often experiences a drop in value before FOMC meetings, followed by significant gains post-announcement.
This pattern has been observed in recent meetings, with Bitcoin surging by 22.07%, 26.34%, 18.09%, and 15.95% after the Fed’s decision to hold interest rates steady.
As the crypto market braces for the upcoming FOMC meeting and CPI report, dubbed “Wild Wednesday” by some analysts, Bitcoin has already dropped 8.25%.
The anticipated volatility has caught the attention of traders and market watchers, with many expecting a potential rebound in Bitcoin’s price post-announcement.
Bitcoin’s open interest in futures markets has surged to a near all-time high of $18.752 billion, signaling increased trading activity and enthusiasm. This rise in open interest is often associated with increased volatility and potential price surges in Bitcoin.
A dormant wallet transferred 8,000 BTC, valued at approximately $535.64 million, to Binance, indicating that significant market players are preparing for upcoming volatility.
A wallet that had been dormant for 5.5 years transferred 8K $BTC($535.64M) to #Binance 40 mins ago.
The wallet received 8K $BTC on Dec 6, 2018, when the $BTC price was $3,810.https://t.co/zvxAKbHKi6 pic.twitter.com/ZKZHdm4JkR
— Lookonchain (@lookonchain) June 11, 2024
Despite the recent pullback, some analysts remain optimistic about Bitcoin’s prospects. QCP, a hedge fund, noted that the sell-off might present a good opportunity to accumulate coins, while others pointed out that Bitcoin has consistently exhibited notable volatility around FOMC meetings and has often recovered and thrived after the initial uncertainty dissipates.
Bitmex and Binance Decoupling
“Often this kind of phenomenon is seen when whales in Bitmex start to accumulate positions while Binance retail gets washed out.” – By @BQYouTube
Read more ????https://t.co/xpBNMr6465
— CryptoQuant.com (@cryptoquant_com) June 11, 2024
As we all await the Fed’s decision and the release of the CPI report, the cryptocurrency market is poised wild day.
With Bitcoin’s historical tendency to rally post-FOMC and the increased trading activity signaled by the surge in open interest, traders and investors are closely monitoring the market for opportunities amidst the anticipated volatility.
