Bitcoin nosedives below $57,000 to two-month low ahead of U.S. Fed decision

The cryptocurrency market experienced a significant downturn on Wednesday, with Bitcoin leading the decline.

Bitcoin plunged to its lowest level in over two months, falling below $57,000 for the first time since late February.

Rival cryptocurrencies like Ether, Solana, and XRP also experienced notable drops.

Experts attribute this sharp decline to a combination of factors, including broader risk aversion in markets and upcoming interest rate decisions by the U.S. Federal Reserve.

Investors are anxiously awaiting the Fed’s policy announcement, seeking guidance on the potential for future interest rate cuts.

Geoff Kendrick, Standard Chartered’s head of digital asset research, noted that Bitcoin’s fall below $60,000 has opened up a possible path to a further decline in the $50,000-$52,000 range.

He cited a number of reasons for the downturn, including outflows from U.S. spot Bitcoin exchange-traded funds, a worsening macro backdrop, and limited liquidity.

Kendrick also highlighted the lackluster response to the launch of spot Bitcoin ETFs in Hong Kong earlier this week.

Despite solid net asset positions, the ETFs saw low turnover volumes, suggesting limited market enthusiasm.

The downward trend in crypto markets was further fueled by the recent imprisonment of Binance’s former CEO for money laundering charges.

These negative developments have created uncertainty and cautious sentiment among investors, contributing to the sell-off.