Bitcoin price falls ahead of anticipated Fed and ECB rate hikes

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Bitcoin's price briefly dipped below $29,000 for the first time in a month on Monday amid headwinds from expected rate hikes this week at the Federal Reserve and the European Central Bank.

will announce its next rate decision, with analysts expecting a hike of 25 basis points to bring its target range to 5.25-5.50%. On Thursday, the ECB is expected to raise rates by 25 basis points to 4.25%.

Investors will pay close attention to the wording of the Fed's post-rate decision statement. Should hawkish sentiments persist, bitcoin's consolidation around the $29,000 mark might face downward pressure."Bitcoin headwinds emerge from the anticipated rate hikes from both the Federal Reserve and the European Central Bank this week," Jeff Feng, co-founder of Sei Labs, told the Block.

Both metrics indicate liquid bitcoin supply is shrinking as more coins are being stowed away in cold storage wallets. "This lowered supply, assuming steady demand, could create a supply-demand imbalance that boosts bitcoin's price trajectory," Feng said, adding that the data suggested miners are holding their rewards rather than selling them on exchanges."This accumulation phase amongst miners signals bullish sentiment from one of Bitcoin's most critical factions."also indicates a downward trend in the highly liquid supply of bitcoin.

"Bitcoin long-term holder supply has reached a new all-time high of 14.52 million BTC, equivalent to 75% of the circulating supply," Glassnode© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

 

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