Mar 20 2024: On Wednesday, the price of Bitcoin dropped to a two-week low, touching $60,000 as investors took profits ahead of a Federal Reserve meeting. This decline came amidst significant capital outflows from a major exchange-traded fund, adding pressure to Bitcoin’s value.
The broader market sentiment favored risk-off moves, with traders shifting towards the dollar and booking profits in Bitcoin. This move followed Bitcoin’s earlier surge to record highs above $73,000 in March.
Ahead of the Fed meeting, the dollar index reached a two-week high. The market expected the central bank to maintain interest rates and provide guidance on future rate cuts.
At 00:51 ET (01:48 GMT), Bitcoin was trading at $61,287.9, having fallen to $60,850.9 earlier in the day.
Further downward pressure on Bitcoin came from a flash crash on BitMEX, where it briefly plummeted to $8,900 due to a series of large sell orders on Tuesday. BitMEX announced an investigation into potential misconduct.
While Bitcoin continued to see capital inflows, the Grayscale Bitcoin Trust (NYSE:GBTC) experienced significant outflows of $1.25 billion in the past week. This contributed to a $2 billion decline in the fund manager’s assets under management, adding selling pressure to Bitcoin.
Despite these challenges, Bitcoin remained up by approximately 50% in 2024, driven by increased buying after the approval of spot ETFs by the Securities and Exchange Commission.
The upcoming halving event, scheduled for April, is also anticipated to support Bitcoin as it reduces the rate of new Bitcoin generation every four years. Analysts viewed the current weakness in Bitcoin as a buying opportunity ahead of the halving event.
