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Bitcoin briefly fell to a low of $60,804 in a volatile trading session on Wednesday and then recovered.
At the time of writing, Bitcoin had recovered and was trading at just over $64,139, up about 2.31% from 24 hours earlier. Earlier on Wednesday, Bitcoin hit an intraday high of $64,403.
Despite the recent price drop, Bitcoin has maintained impressive performance, recording a 124% year-on-year increase. Last week, the world's leading cryptocurrency hit a record high of almost $73,800.
After days of declines, Bitcoin sank to a near two-week low as demand for U.S. exchange-traded funds dried up. Since their launch on Jan. 11, the goods have generated a net inflow of $11.7 billion, with the largest outflow occurring on Tuesday.
Bitcoin's decline also comes amid uncertainty over whether above-target inflation will prompt Fed policymakers to reduce their rate cut estimates at their meeting on Wednesday, implying a less favorable outlook for speculators.
The day of the Fed's big policy decision is just around the corner
Investors are waiting for the Fed's monetary policy decision today, especially because no rate change is predicted at the time of the announcement at 2 p.m. It is also unlikely that Fed Chairman Jerome Powell will hint at rate cuts at a news conference following the decision.
Today's meeting will focus on the Fed's next steps as it begins detailed discussions about reducing its balance sheet, often known as quantitative tightening. The funding market suggests that the Fed still has time to decide exactly how and when it will do this.
Economists agree that the Fed will continue its current course (three rate cuts, the first in June), although this is not a given. At least as far as inflation is concerned, the year 2024 was characterized by values that were above expectations.
Bitcoin has always responded to major Fed decisions, but whether this will impact prices this time is unclear.
About the author
Tomiwabold Olajide
Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducts comprehensive price analysis, and shares predictions on estimated market trends. Tomiwabold graduated from the University of Lagos.
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