Leading cryptocurrency Bitcoin has tumbled by 2.9% ahead of tomorrow’s FOMC meeting and CPI report.
The Federal Reserve is set to announce its decision on interest rates tomorrow. However, market participants are expecting the rates to remain unchanged, according to the CME FedWatch tool.
The U.S. Consumer Price Index (CPI) report will be released tomorrow, with analysts expecting the headline CPI to be at 3.4%, while core CPI is estimated to be at 3.5%.
The Federal Reserve is thus not likely to cut rates, as the CPI data would still be far greater than the FOMC’s expected target of 2% over the long run.
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Notably, Bitcoin spot U.S. ETFs have witnessed an outflow of $65 million for the first time in 19 trading days, according to data analytics platform Sosovalue.
This is in stark contrast to Bitcoin U.S. spot ETFs witnessing its second-highest inflows on June 5.
Grayscale’s GBTC ETF saw a net outflow of almost $40 million in the past 24 hours. GBTC has now witnessed outflows exceeding $36 million for three consecutive days.
On June 7, British banking heavyweight Standard Chartered reiterated its stance that Bitcoin’s price will reach $100,000 as the U.S. presidential election begins and that it could go as high as $150,000 if former U.S. President Donald Trump returns to power.
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But Bitcoin is currently facing a severe negative correlation to U.S. bond yields, according to a Bloombergreport. The 30-day correlation between Bitcoin and the US 10-year treasury yield stood at -53, which is one of the worst readings in 14 years, according to the report.
Bitcoin is largely being hoarded as “digital gold” rather than being used as a form of payment, according to CryptoQuant CEO Ki Young Ju, which means that its circulation has reached a low it's not seen in 13 years.
#Bitcoin is circulating as slowly as 13 years ago.
Despite Satoshi's vision of "P2P Electronic Cash," Bitcoin is primarily used as "Digital Gold," with institutions holding it without frequent transactions.
Although the transaction velocity of Bitcoin is the same as it was 13 years ago, Ju added that the transaction velocity would have been proportionally higher had the data included Bitcoin’s Layer-2 transactions as well.
Bitcoin is not the only asset that has seen a downturn in its price; the entire broader market is down by 2.8% in the past 24 hours, with most assets decreasing between 2% and 13%.
In the past 24 hours, derivatives traders were liquidated for $168 million, with long liquidations at $143 million, according to derivatives analytics platform Coinglass. Bitcoin and Ethereum each accounted for roughly $49 million worth of those liquidations from the past day.
At the time of writing, Ethereum is down by more than 6% in the past 7 days and trading for $3,538.67.
Amid the ongoing market turmoil, two tokens have managed to buck the trend. Injective and Akash Network have seen the price of their tokens rally by 9.5% and 1.5%, respectively, according to CoinGecko.
