05/01 update below. This post was originally published on April 30
Bitcoin and cryptocurrencies—including major coins ethereum and XRP—have fallen ahead of the Federal Reserve’s interest rate decision this week (though some think the Fed could be blown out of the water).
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The bitcoin price has dropped back to around $60,000 per bitcoin, dragging down the price of ethereum, XRP and the wider crypto market, wiping away some $500 billion since it hit a recent peak of $2.9 trillion despite a leak revealing a fresh spot bitcoin exchange-traded fund (ETF) earthquake could be around the corner.
Now, as an executive at Elon Musk’s X reveals the platforms “end goal,” a “perfect storm of negatives” has crashed the bitcoin price ahead of Fed chair Jerome Powell’s interest rate decision announcement.
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U.S. Federal Reserve chair Jerome Powell will reveal the Fed’s latest interest rate decision on … [+]
“The last few weeks have been a perfect storm of negatives for digital assets,” Standard Chartered’s head of FX and crypto research Geoff Kendrick wrote in an emailed note. “Bitcoin ETF inflows have stalled, and ethereum ETFs now look unlikely to be approved in May as expected.”
Kendrick pointed to the increasing likelihood Fed interest rate cuts will be “pushed back,” while “risky assets” like bitcoin, ethereum and XRP “have been pulled lower by the escalation of the conflict in the Middle East.”
05/01 update: The bitcoin price crash has suddenly accelerated, with $300 billion being wiped from the combined ethereum, XRP and crypto market in a less than a week. The ethereum price is down 10% since this time yesterday, along with bitcoin, while major rival solana is down 12%. Ripple’s XRP is down 5% while Binance’s BNB is down 9%.
“Bitcoin’s closing price on Tuesday became the lowest since late February, confirming the downward trend and falling under March and April support and the psychologically important round level,” Alex Kuptsikevich, FxPro senior market analyst, said in emailed comments.
“Bitcoin ended April down 15.5% to $59,000, after six months of gains out of the last seven (January bitcoin ended virtually unchanged). Technical downside targets now look to be $55,700 per bitcoin, a 61.8% Fibonacci retracement of the rise since October, and the $51,000 to $52,000 area, the late January consolidation area. However, both FOMC announcements later today and monthly jobs data on Friday have enough potential to accelerate or reverse the downtrend.”
The Fed’s federal open market committee (FOMC) is expected to leave rates unchanged at a range of 5.25% to 5.5% on Wednesday, though traders will be closely watching chair Powell’s 2:30pm ET press conference for signs the Fed could signal a change to its planned series of interest rate cuts this year.
“While the Fed is expected to maintain the status quo on interest rates, commentary on its current thinking on the trajectory of rates in the remainder of the year will likely have a significant impact on markets,” Russ Mould, investment director at AJ Bell, said in emailed comments.
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The bitcoin price has fallen back from its recent peak of around $73,000 per bitcoin, dragging down … [+]
“The worst-case scenario for tomorrow would be for the Fed to disclose that they were talking about hiking again,” market analyst and author of the Crypto Is Macro Now newsletter Noelle Acheson wrote in a note. “Analysts are chattering about this, but such a brusque pivot from the Fed’s ‘cuts are imminent’ position just a few months ago would send the alarming message that things are really bad and could get worse.”
Meanwhile, U.S. Treasury secretary Janet Yellen, a former Federal Reserve chair, is also due to announce the Treasury’s general account refinancing decision on Wednesday—something legendary crypto trader and founder of the Maelstrom investment fund Arthur Hayes thinks is more important than the Fed.
Despite the current “perfect storm,” Kendrick said Standard Chartered still thinks the bitcoin price will hit 150,000 this year, while ethereum is predicted to more than double to $8,000.
“We think the bad news is already priced in for bitcoin and ethereum, and that positive structural drivers will take over again as negative drivers fade,” Kendrick added.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
