Bitcoin Dips Ahead of CPI Report and Fed Meeting

It appears that price correction is coming after a rally week. Price volatility is back ahead of two major macro events this week.

A 7% drop wiped out over $333 million worth of Bitcoin long positions in the last few hours, according to CoinGecko data. Bearish momentum arose after Bitcoin dipped from $43,500 to $41,700 before reclaiming $42,000 mark.

The recent flash of the largest coin has sent altcoins tumbling. Ethereum (ETH) dropped below $2,300, falling 8.98% within 24 hours. Solana (SOL) fell 3.63%, Ripple (XRP) fell 5.95%, Cardano (ADA) fell 6.78%, Polkadot (DOT) fell 6.7%, and Chainlink (LINK) fell 8.1%, to name a few.

The crypto market suffered a major setback after a series of events that ruined widespread trust. However, the bull revisited town after BlackRock’s filing for a spot Bitcoin exchange-traded fund (ETF). Following BlackRock’s move, several financial giants joined the ETF race. Institutional interest has fueled the momentum. Bitcoin has consequently climbed above 150% this year with the spotlight on last week when price broke $44,000 mark, sending most altcoins upward.

The latest correction is not out of expectation, especially ahead of two major macro events this week. Consumer Price Index (CPI) data is set for December 12, followed by the Federal Open Market Committee (FOMC) meeting on December 13.

All eyes are on this year’s final policy meeting since the U.S. Federal Reserve (Fed) kept the rate unchanged in the November meeting. Market observers bet on the possibility that the Fed will start to cut interest rates in 2024. The Fed Chairman Jerome Powell, however, warned in his latest speech that inflation was still high and the agency wouldn’t rule out more increases.

With all the information, market investors should be prepared for an imminent volatility this week.