Why is Bitcoin Price Down Today? Will BTC Price Drop below $60K By Weekend?

The post Why is Bitcoin Price Down Today? Will BTC Price Drop below $60K By Weekend? appeared first on Coinpedia Fintech News

Renowned crypto analyst Michaël van de Poppe has warned investors about Bitcoin’s bearish divergence, indicating potential downward pressure on the cryptocurrency. As BTC experienced a 6% drop on Tuesday, falling to around $63,400.

The decline was the biggest one-day decline in two weeks, driven by a surge in cryptocurrencies. However, van de Poppe highlighted several factors contributing to Bitcoin’s downward trend.

Key Reasons Behind Drop

Upcoming FOMC Meeting 

Poppe highlighted the upcoming FOMC (Federal Open Market Committee) scheduled for March 20, 2024, which will have a major impact on the crypto market.

At the recent FOMC meeting on January 30-31, 2024, the Federal Reserve kept interest rates at 5.25%-5.50%. This decision means the Fed is still taking a break from the rate hike that began in March 2022 to combat inflation.

Additionally, the Fed has signaled a willingness to leave rates unchanged until inflation shows signs of moving below the 2% target. Due to this, many analysts and investors expect the central bank to continue withholding rates for March 20, 2024.

BoJ Ends Negative Rates Era

Recently japan’s central bank stopped having negative interest rates after eight years to encourage lending and demand. In the first interest rate hike in 17 years, the Bank of Japan (BOJ) raised the short-term policy rate from -0.1% to zero to 0.1%.

Indeed some analysts warn that the BOJ will approach further rate hikes with caution due to weak economic recovery.

Grayscale’s BTC Selling Continues

After Grayscale changed its fund to a Bitcoin ETF on January 10 after the approval of spot Bitcoin ETF by the SEC, it started moving its BTC to Coinbase for selling.

Previously, Grayscale’s bitcoin fund was in the form of a closed-end fund, requiring investors to hold shares for at least six months. Now that ETFs exist, investors can easily take their holdings and profits, which they are likely doing again.

Altcoins May Offer Opportunity

As the price of bitcoin falls, van de Poppe says it could be good for altcoins. If Bitcoin becomes less dominant, altcoins could be attractive to investors who want to diversify and grow their wealth in the crypto market.

Meanwhile, Van de Poppe’s research provides valuable insights for investors to better understand crypto trading.