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Highlights
- Bitcoin price pares all weekly gain as it fell to $66,000 after hitting $70,000.
- Investors sold Bitcoin as the U.S. government moved $2 billion in Bitcoin to a new wallet.
- Traders also brace for volatility ahead of the Fed rate decision and Powell press conference.
- BTC recorded $70 million in longs liquidation in the last 24 hours.
Bitcoin price continues to remain under pressure after it fell more than 5% to under $66,000 level on Tuesday. The move comes primarily due to the U.S. government transferring $2 billion in bitcoins, sparking concerns of a further decline in negative sentiment. Traders anticipate consolidation will continue ahead of the US Federal Reserve interest rate decision.
Despite an overall sentiment on the Fed rate cuts in September, the stock and crypto market traders are bracing for pullbacks in the coming days. US stock market futures are trading higher at press time. CME FedWatch shows a 90% probability of the Fed rate cut of 25 bps in September.
Traders Took Cues From U.S. Government Selloff and Mt. Gox
Traders immediately sold BTC after the U.S. government transferred more than $2 billion worth of Bitcoin from the stash it seized from Silk Road dark web marketplace. According to Arkham Intelligence, a U.S. Government: Silk Road DOJ Confiscated Funds labeled wallet moved 29,800 BTC in two transactions.
However, Bloomberg analyst James Seyffart suggested that a custody deal with Coinbase was behind the recent $2 billion Bitcoin transfer by the US Marshals Service. Meanwhile, test transfer by Mt. Gox turned traders cautious, preventing any rebound in Bitcoin price today. Mt. Gox holds 80.128k BTC, which is valued at $5.35 billion.
Notably, Coinglass data indicates the crypto market saw $170 million in total liquidations in the last 24 hours, with $147 million in longs liquidated. BTC recorded $70 million in longs liquidation and $7 million in short positions liquidation.
Scott Melker, known as The Wolf of All Streets, predicts BTC price action currently is not ideal at the moment. BTC formed a bearish divergence with RSI on the daily chart and most lower time frames. He recommends watching for hidden bullish divergence.
BTC price currently trades at $66,443, with a 24-hour low and high of $65,894 and $69,987, respectively. The trading volume has witnessed a 67% increase over the last 24 hours.
Also Read: Mt. Gox Readies Transfer of Remaining 80.5K Bitcoins, BTC Faces Pressure
Donald Trump-Driven Bitcoin Price Rally Fades
Crypto Fear and Greed Index dropped from 74 to 67 as investors brace for potential losses due to volatility ahead of the FOMC meeting. Uncertainty has soared in the markets amid heightened geopolitical tensions in the Middle East and expectations of a rate cut in September.
Bitcoin price today has pared mostly all weekly gains. BTC price slumped after it hit $70,000 amid Donald Trump’s speech at the Bitcoin Conference in Nashville, Tennessee last week. Donald Trump spoke about making Bitcoin a strategic reserve and firing anti-crypto SEC Chair Gary Gensler.
The 10-year Treasury held its recent decline further below 4.2%, moving near its lowest level since March. On the contrary, the U.S. Dollar Index (DXY) has soared above 104.73, causing some pressure on Bitcoin value.
Moreover, Wall Street giants Morgan Stanley and Goldman Sachs predicted three cuts this year starting in September. “Considerable progress on inflation allows the Fed to inch closer to rate cuts. Chair Powell should emphasize increased confidence,” said Morgan Stanley.
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