March 27, 2024
Bitcoin's at $63,010, Dips to $60,760 Faces Breakdown Threat
Bitcoin price today

Bitcoin’s at $63,010, Dips to $60,760 Faces Breakdown Threat

Wednesday, March 20, 2024: Bitcoin Price is at $63,010, faced the threat of a fresh breakdown on March 20, with its price hovering around the $61,000 mark. Analysis indicated that crucial support levels were at risk of “cracking” as BTC continued to experience selling pressure. The cryptocurrency’s price dipped to $60,760 on Bitstamp, marking a 17.5% decline from its all-time highs.

BTC/USD 1-hour chart. Source: TradingView

Key Headwinds Contributing to Price Decline

Several factors contributed to the downward pressure on BTC. Outflows from spot Bitcoin exchange-traded funds (ETFs) in the United States, coupled with anticipation surrounding the Federal Reserve’s decision on interest rates on March 20, played a significant role. Market participants were closely monitoring Fed Chair Jerome Powell’s commentary following the Federal Open Market Committee (FOMC) meeting for potential guidance on future monetary policy.

Fed target rate probabilities for June FOMC meeting. Source: CME Group

Market Analysis and Outlook

While the Fed’s decision to maintain rates was expected, attention shifted to Powell’s remarks and their impact on risk assets like Bitcoin. Despite minimal chances of a rate cut in March, analysts remained cautious about potential shifts in Fed policy. The prospect of a “pivot” in monetary policy was deemed unlikely in the short term, with estimates from CME Group’s FedWatch Tool suggesting a low probability of rate cuts soon.

U.S. spot Bitcoin ETF flows (screenshot). Source: Farside

Implications of ETF Outflows and Market Sentiment

The outflows from spot BTC ETFs, particularly the Grayscale Bitcoin Trust (GBTC), raised concerns about BTC’s price strength. Although the outflows were lower than in previous days, the lack of significant inflows from other ETF products contributed to subdued market sentiment. Traders attributed the slowdown in ETF activity to a cautious approach ahead of the FOMC meeting and ongoing tax season in the US. Despite the temporary slowdown, market participants anticipated a return to regular trading patterns following some initial volatility.

Photo by Karolina Grabowska

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