Bitcoin price slumped nearly 5% on Tuesday, hitting lows of $66k as the crypto market turned negative ahead this week’s FOMC meeting.

BTC price dropped to lows of $66,018 on Coinbase to wipe out gains seen when prices reached highs of $71,974 last Friday.

CoinGecko data showed Bitcoin traded nearly 5% down in 24 hours. The flagship cryptocurrency has pared weekly gains and was down 6% during this period at the time of writing.

Why is Bitcoin price down on Tuesday?

The benchmark cryptocurrency’s struggles this week come after spot Bitcoin ETFs snapped a decent 19-day streak of net inflows on Monday. Data showed the sector recorded outflows of about $65 million.

Also on Tuesday, a Bitcoin wallet that had been dormant for more than 5 years, suddenly woke up and transferred 8,000 BTC worth more than $535 million to several addresses, including Binance.

According to Lookonchain, this wallet received 8,000 BTC on December 6, 2018. The price of Bitcoin was $3,810 at the time.

Risk-off mood ahead of CPI and FOMC

While price remains well above the psychological $60,000 level, the upcoming FOMC minutes and Fed Chair Jerome Powell’s commentary has investors keenly watching.

It ties in with the overall macro environment, including the economic reports expected this week, and market experts have signaled this as a scenario that could feature highly on investors’ list of factors to consider.

“Markets are risk-off mode ahead of CPI and FOMC tomorrow. This month’s FOMC will also release the Dot Plot, which informs the market how many cuts the Fed anticipates for the rest of 2024,” analysts at QCP Capital, a global digital asset trading firm and market maker, said.

Analyst: ‘we’ve seen this before’

Although prices could dip further ahead of these macroeconomic reports and Fed’s interest decision, pseudonymous crypto analysts Moustache and Max say FOMC has historically been bullish for Bitcoin.

“FOMC tomorrow and $BTC forms a bullish inverse head & shoulders pattern here. The past FOMC meetings have already marked the low of the left shoulder + head. Right shoulder next?” crypto trader Moustache pointed out to his 123,000 X followers.

Sharing a Bitcoin price chart with FOMC meetings mapped on it, Max notes the last three have coincided with a dip and then a bullish flip. “We’ve seen this before,” the analyst posted on X.

“Bitcoin loves to rebound after every FOMC meeting,” another crypto analyst Ali Martinez noted.