Why Does BTC Price Fall Before the Fed Interest Rate Decision?
There may be several reasons why BTC price dropped before the Fed interest rate decision:
**one. Risk Aversion:** Interest rate increases increase risk and investors start avoiding risky assets, for example BTC. This may cause a decrease in BTC price.
**2. Flow to Safe Havens:** Interest rate increases make the dollar more attractive and investors can exit other assets such as BTC by buying dollars. This may cause a decrease in BTC price.
**3. Liquidity Decrease:** Interest rate increases increase investors' cost of borrowing, which reduces the liquidity investors can use to purchase BTC. A decrease in liquidity may also cause a decrease in BTC price.
**4. Macroeconomic Concerns:** Interest rate increases are often associated with economic recession concerns. Economic recession concerns reduce investors' risk appetite, which could lead to a decline in BTC price.
**5. Correlation:** There has been a high correlation between BTC and Nasdaq index lately. The interest rate increase could also negatively impact Nasdaq, which could lead to a decline in BTC price.
**6. Manipulation:** Some analysts argue that declines in BTC price are due to large investors trying to manipulate the market.
**However, it should not be forgotten that:**
* BTC price is highly volatile and can be affected by many factors.
* Interest rate increases do not always have a negative impact on the BTC price.
* In the long term, BTC price is expected to follow an upward trend.
**It is important to do your own research and consider the risks before investing.**
**What I say is not investment advice.**