The result of today’s Federal Reserve minutes, Bitcoin miners’ robustness and increasing stablecoin demand in China could be signs that BTC has bottomed.
Bitcoin (BTC) price crashed between April 30 and May 1, with its price decreasing by 11.5% to $56,522. This downturn triggered $172 million in leveraged long position liquidations, which is notably low given that BTC futures open interest was at $28.9 billion before the price crash. Consequently, it would be simplistic to assume that bulls were taken by surprise.
Some analysts believe that investors are in a holding pattern until Jerome Powell, Chair of the United States Federal Reserve (Fed), concludes his speech following the two-day monetary council meeting on May 1. Although it is widely expected that the Fed will maintain interest rates at 5.25%, there is considerable skepticism regarding the U.S. Treasury Department's ability to finance the government's budget.
On April 30, the yield on the U.S. Treasury 2-year note climbed to its highest level in five months, reaching 5.06%, as investors sought higher returns to offset increased risk following the announcement of a $1.07 trillion deficit for the first half of 2024. Since the Fed's rate hikes throughout 2023, interest expenses on the deficit have risen by 23% in the first half of 2024 and are projected to continue to rise as long as rates remain elevated.
