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Why is crypto down today? How FOMC, geopolitics impacted BTC
Assessing crypto market sell-off drivers and what to expect post-FOMC.
The cryptocurrency market has been under pressure in recent times, with Bitcoin [BTC] currently stuck within the $80K-$85K range. Despite hopes of a potential Fed’s dovish tilt, analysts have remained cautious. On Tuesday, BTC triggered another bout of crypto market sell-off after dipping to $81K from $84K and closed the daily session with a 1.54% loss.
The first day of the FOMC (Federal Open Market Committee) meeting saw Bitcoin decline, with many linking this to geopolitical tensions. According to QCP Capital’s daily market report, renewed tensions in the Middle East fueled the sell-off. It highlighted that in the absence of fresh tariff headlines, geopolitics have returned to the forefront. Israel’s renewed strikes on Gaza following a temporary truce have pushed gold soaring past $3,000, while BTC continues to exhibit a negative correlation.
As we head into the FOMC meeting, it remains unclear whether the Fed rate decision will fuel crypto recovery or extend the decline. However, Jake Ostrovskis, an OTC trader at Wintermute, emphasized that BTC and crypto would struggle to turn higher without being led by wider risk U.S. equities rather than gold. “You cannot trade Crypto in a vacuum,” he noted.
Furthermore, Swissblock’s blockchain analytics firm reiterated that the market is currently in a ‘high-risk’ state, with downside risk unable to be overruled. The risk-off sentiment was corroborated by the crypto fear and greed index, which has fallen to ‘fear’ levels of 32. While this could represent a “buy” opportunity for long-term investors, the Fed policy outlook may offer clues for such a move.
In light of these developments, QCP Capital also warned that President Trump’s new round of tariffs scheduled for April 2nd could be key data to watch after the FOMC meeting. It noted, “BTC at $80K: A real floor or a mirage? Momentum & carry trades are unwinding. While BTC has found some support, the macro backdrop suggests it could be short-lived.”
For now, analysts will continue to monitor the situation closely as the cryptocurrency market attempts to find its footing amidst this uncertain environment.
Source: https://ambcrypto.com/why-is-crypto-down-today-how-fomc-geopolitics-impacted-btc/
