"Bitcoin's Decline: Understanding the Key Factors

Bitcoin's recent fall can be attributed to a combination of factors, including the Federal Reserve's expected interest rate decision and Fed Chairman Powell's statements. Market anxiety is building ahead of Powell's remarks, scheduled for today.

Another significant contributor to the decline is the decrease in ETF investments, particularly in Bitcoin ETFs, which have consistently closed in the negative for the past week. This has resulted in a substantial outflow of over $500 million from ETFs in just a few days.

According to Fineqia research analyst Matteo Greco, "The current downward trend can be attributed to profit-taking by investors who entered the market during the 2022 and 2023 crises, as well as ETF investors who witnessed a significant price increase in their shares earlier this year."

From a macro perspective, while the Fed is not expected to change interest rates, investors are growing concerned that the central bank may not cut rates at all this year, potentially impacting interest rate-sensitive assets like cryptocurrencies, emerging market stocks and bonds, and commodities. This concern is driving uncertainty in the market.

The Fed will announce its interest rate decision at 21:00 today, followed by Powell's press conference at 21:30.

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