Bitcoin BTC Expected to Surge Today as Crypto Market Prepares for FOMC Meeting CPI Report
Bitcoin and other cryptocurrencies saw a significant decline, with BTC dropping to nearly $66,000.
The drop in the crypto market is attributed to investors reducing their risks prior to the release of the May Consumer Price Index (CPI) report and the Federal Reserve (Fed) meeting on Wednesday, June 12.
Historical data shows that Bitcoin tends to decrease in value before FOMC meetings and then rally after the announcement.
The upcoming FOMC meeting and CPI report are expected to cause volatility in the crypto market, with some analysts predicting a potential increase in Bitcoin’s price after the announcement.
Bitcoin’s open interest in futures markets has reached new highs, indicating increased trading activity and potential price increases.
The cryptocurrency market experienced a sharp correction on Tuesday, with Bitcoin (BTC) leading the decline by dropping to a three-week low of $66,170.
The decline triggered over $250 million in liquidations of leveraged derivatives trading positions across all crypto assets, as investors reduced their risks ahead of the crucial May Consumer Price Index (CPI) report and the Federal Reserve (Fed) meeting scheduled for Wednesday, June 12.
Historical data suggests that Bitcoin often experiences a drop in value before FOMC meetings, followed by significant gains after the announcement.
This pattern has been observed in recent meetings, with Bitcoin surging by 22.07%, 26.34%, 18.09%, and 15.95% after the Fed’s decision to hold interest rates steady.
As the crypto market prepares for the upcoming FOMC meeting and CPI report, dubbed “Wild Wednesday” by some analysts, Bitcoin has already dropped 8.25%.
The anticipated volatility has caught the attention of traders and market watchers, with many expecting a potential increase in Bitcoin’s price after the announcement.
Bitcoin’s open interest in futures markets has reached a near all-time high of $18.752 billion, signaling increased trading activity and enthusiasm. This rise in open interest is often associated with increased volatility and potential price increases in Bitcoin.
A dormant wallet transferred 8,000 BTC, valued at approximately $535.64 million, to Binance, indicating that significant market players are preparing for upcoming volatility.
Despite the recent decline, some analysts remain optimistic about Bitcoin’s prospects. QCP, a hedge fund, noted that the sell-off might present a good opportunity to accumulate coins, while others pointed out that Bitcoin has consistently exhibited notable volatility around FOMC meetings and has often recovered and thrived after the initial uncertainty dissipates.
As we all await the Fed’s decision and the release of the CPI report, the cryptocurrency market is poised for a wild day. With Bitcoin’s historical tendency to rally after FOMC and the increased trading activity signaled by the surge in open interest, traders and investors are closely monitoring the market for opportunities amidst the anticipated volatility.
