Bitcoin Holds Steady at $57K Amid Crypto Market's 6% Decline: How Will the Fed Decision Impact You?

Bitcoin Holds Steady at $57K Amid Crypto Market's 6% Decline: How Will the Fed Decision Impact You?

 1-Bitcoin Drops Alongside Broader Crypto Market, Ethereum and Altcoins Also See Declines.

2-Risk-Off Sentiment Takes Hold as Fed's Interest-Rate Decision Looms, Affecting Financial Markets.

3-10x Research Anticipates Continued Selling Pressure, Setting Bitcoin Price Target at $52,000-$55,000.

Bitcoin Hold Steady at $57k

Bitcoin (BTC) was trading near $57,700 during the European morning on Wednesday, following a dip to its lowest point since late February, marking its worst monthly performance since November 2022. BTC fell approximately 6.3% in the last 24 hours, dropping below the $60,000 support level on Tuesday evening, according to CoinDesk data. The broader crypto market, as indicated by the CoinDesk 20 Index (CD20), shed almost 9% before regaining some ground.Cryptocurrencies have faced significant pressure from a risk-off sentiment in broader financial markets, driven by concerns about stagflation in the U.S., with slowing growth and persistent inflation diminishing expectations for an interest rate cut from the Federal Reserve. The Federal Open Market Committee is set to announce its latest interest rate decision later today.

Ether (ETH) dropped approximately 5%, slipping below the $3,000 mark, while dogecoin (DOGE) led the decline among major altcoins with a 9% fall. Solana (SOL) and Avalanche (AVAX) both declined by around 6%.

Bitcoin saw a downturn in April, marking its first monthly loss since August. The 16% drop was the steepest since November 2022, when the FTX crypto exchange collapsed. However, some analysts are cautioning that there could be further downward movement in the near term.

Digital asset research firm 10x Research indicated that there might be selling pressure pushing Bitcoin towards the $52,000 level due to outflows from U.S. spot exchange-traded funds, totaling $540 million since the Bitcoin halving on April 20. They estimate that the average entry price for U.S. Bitcoin ETF holders is $57,300, suggesting this could act as a significant support level.

As Bitcoin’s spot price gets closer to this average entry price, the risk of further ETF sell-offs increases, wrote 10x CEO Markus Thielen on Wednesday.

There may have been a significant number of 'TradeFi' tourists in the crypto market who were bullish up until the Bitcoin halving—those times are now over," he wrote."We expect increased selling pressure as the average Bitcoin ETF investor would incur losses if Bitcoin falls below $57,300."

This could drive prices down to our target range and lead to a 25% to 29% correction from the $73,000 peak, suggesting our expected price targets of $52,000 to $55,000 over the next three weeks."

UPDATE (May 1, 8:56 UTC): Price updates throughout the article.

UPDATE (May 1, 9:57 UTC): Price updates throughout the article.

UPDATE (May 1, 11:05 UTC): Added analysis from 10x Research.