Bitcoin price plunged 5% over the last 24 hour due to factors such as US government moving Silk Road bitcoins to Coinbase and concerns ahead FOMC meeting.
Bitcoin price saw a sudden slide over the past 24 hours after hitting $70,000, falling more than 5% to under $66,000 level on Tuesday. It follows the transfer of $2 billion in bitcoins by the U.S. government, sparking concerns as the move comes just before the US Federal Reserve interest rate decision.
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 soared in the markets amid heightened geopolitical tensions in the Middle East and expectations of a rate cut in September.
Bitcoin price has pared mostly all weekly gains. BTC hit $70,000 amid Donald Trump’s speech at the Bitcoin Conference in Nashville, Tennessee last week. Notably, traders ruled out the current macroeconomics as the primary factor restricting Bitcoin rally. The 10-year Treasury held its recent decline to below 4.2%, moving near its lowest level since March. Moreover, the U.S. Dollar Index (DXY) held above 104.5.
US stock market futures are trading higher at press time. CME FedWatch shows a 90% probability of the Fed rate cut by 25 bps in September. 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.
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.
Bloomberg analyst James Seyffart suggests a custody deal with Coinbase is behind the recent $2 billion Bitcoin transfer by the US Marshals Service. However, Bitcoin price fails to rebound due to a recent test transfer by Mt. Gox led traders to hold back. Notably, Mt. Gox currently holds 80,128 BTC valued at $5.35 billion.
BTC price currently trades at $66,716, 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.
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.
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