‘Surprisingly Robust’ Bitcoin Slips Lower as Market Awaits Next Fed Move
The price of bitcoin (BTC) fluctuated on Tuesday, as market participants took a wait-and-see approach ahead of an expected interest rate announcement by the US Federal Reserve (Fed) on Wednesday. Meanwhile, analysts said bitcoin appears resilient in the face of a negative outlook for risk assets.
At 14:13 UTC, BTC stood at USD 38,394, down by 1% for the past 24 hours and down by 5% for the past 7 days. At the same time, ethereum (ETH) traded at USD 2,837, up 0.5% for the day and down almost 6% for the week.
The moves on Tuesday come as the market awaits an announcement from the Fed on Wednesday, with the expectation being that the central bank will raise rates by half a percentage point.
Analysts further expect that the bank will follow that with another half-point raise in June, and possibly more after that, the Wall Street Journal reported Tuesday.
In addition, the Fed is also expected to begin shrinking its USD 9tn asset portfolio in June. It is expected that this will happen at a much faster pace than during similar experiments five years ago, the same report said.
Meanwhile, on-chain analytics firm Glassnode commented on the state of the market in a newsletter on Monday, saying that despite recent losses, BTC has “remained surprisingly robust, on a relative basis.”
“Whilst the S&P500 and Nasdaq indexes traded to new local lows of the prevailing bearish trend, bitcoin prices remain range-bound, and continue to lack any definitive macro momentum in either direction,” the analysts wrote.
Still, Glassnode warned that correlations between bitcoin and traditional markets remain “near all-time-highs,” and said the general perception of bitcoin as a risk-on asset is a “significant headwind” for the price going forward.
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