U.Today - Bitcoin and the broader cryptocurrency market fell on Monday, as investors and speculators braced themselves for a major Federal Reserve meeting later this week.
Anticipation grew around the meeting's potential indication of higher-for-longer interest rates, prompting market participants to gird themselves for potential effects on digital assets.
Bitcoin sank to a one-week low of $61,928 in early trading on Monday before recovering slightly to trade down about 2% at $62,387 at press time.
The demand for approximately a dozen U.S. spot Bitcoin ETFs remains moderate. Bitcoin's 2024 gain has slowed to over 47% from more than 70% in mid-March, when the cryptocurrency reached a record high of nearly $74,000.
The Federal Reserve is expected to announce an interest rate decision on May 1 this week, with a 95.6% chance of leaving rates steady. On May 3, the United States will also release its April unemployment rate. Likewise, expectations for a U.S. interest rate drop this year have dwindled.
Speculation ahead of the Federal Reserve meeting has fueled debate among market participants about the potential trajectory of interest rates and its implications for digital assets. Higher interest rates are being perceived as a headwind on risk assets such as Bitcoin.
As the Federal Reserve prepares to convene and provide insights into its outlook on interest rates and monetary policy, market participants will closely monitor developments and parse statements for clues about the central bank's intentions. Any signals pointing to a more hawkish stance on interest rates could further unsettle digital asset markets, while a dovish tone may offer respite to investors seeking stability.
Expectations remain on BTC price post-halving
A total of 19.68 million BTC have been mined and issued, representing 93.75% of the total supply of 21 million BTC. Thus, approximately 1.312 million BTC will be issued over the next 126 years. A total of 50% of the remaining supply of 1.312 million BTC will be mined between the fourth and fifth halvings.