Bitcoin endured a dip to a two-week low, touching $60,000 as profit-taking ensued ahead of a Federal Reserve meeting. This move, coupled with substantial outflows from a major exchange-traded fund, contributed to the cryptocurrency’s downward trajectory.
Amidst a broader market risk-off sentiment, investors shifted towards the dollar, capitalizing on profits from Bitcoin’s recent surge, which peaked above $73,000 earlier in March.
The dollar index climbed to a two-week high ahead of the Fed meeting, where expectations lean towards steady rates and insights into future interest rate adjustments. Bitcoin traded at $61,287.9 by 00:51 ET, having dropped to $60,850.9 earlier in the day.
In a concerning event, Bitcoin experienced a flash crash on BitMEX, plummeting to $8,900 following substantial sell orders on Tuesday, prompting an investigation into potential market irregularities.
While Bitcoin saw overall capital inflows, the Grayscale Bitcoin Trust (GBTC) witnessed significant outflows of $1.25 billion over the past week, resulting in a $2 billion reduction in assets under management. This trend added to selling pressure on Bitcoin.
Despite these challenges, Bitcoin remains up approximately 50% year-to-date, buoyed by increased buying following the approval of spot ETFs by the Securities and Exchange Commission in U.S. markets.
Anticipation surrounding Bitcoin’s halving event, scheduled for April, is anticipated to provide further support, as it will halve the rate at which new Bitcoin is generated every four years.
Analysts view the current weakness in Bitcoin as a potential buying opportunity, especially in anticipation of the upcoming halving event.
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