Bitcoin falls below $40,000 mark as market uncertainty prevails
The price of Bitcoin recently dropped below $40,000 for the first time in over a month, indicating a 7% decline over the week.
Ethereum is also experiencing a downturn, with a 6% decrease in the past 24 hours, resulting in a price of around $2,300. This market decline reflects the atmosphere of uncertainty surrounding the upcoming 2024 meeting of the Federal Open Market Committee (FOMC), exacerbating tensions in the cryptocurrency market.
Influence of Bitcoin ETFs and expectations of the Fed
Some analysts attribute the recent decline in Bitcoin to massive withdrawals from the Grayscale Bitcoin Trust, which has recently converted to an ETF. Additionally, the potentially less accommodative stance of the Fed regarding interest rates, as anticipated for the next FOMC meeting, could also play a key role in the current market volatility. These combined factors contribute to a ‘risk-off’ sentiment, causing investors to turn away from more volatile assets such as Bitcoin and Ethereum.
Other market considerations
The stock markets, on the other hand, have shown signs of struggling to establish a clear direction, despite slight gains for the S&P 500 and Nasdaq Composite indices. Experts highlight that the early-year rally may continue, but caution about the strength of the current support for stocks, citing the possibility of a significant correction at the slightest restrictive statement from the Fed.