Bitcoin Drops 2% Ahead of FOMC Minutes Release

Bitcoin, the largest cryptocurrency by market capitalization, has experienced a 2% price drop in the past 24 hours, currently trading at $107,700. This decline marks a 1.6% decrease on the weekly chart, as the market takes a momentary pause ahead of the Federal Open Market Committee (FOMC) release of the May 6 and 7 Meeting Minutes.

On Wednesday, Bitcoin, along with the rest of the crypto market, saw a small retrace, dropping 2.7% from the $110,000 Daily Opening to a multi-day low of $107,107. This suggests a cautious approach from investors, despite Bitcoin's significant 15% rally over the past month, which saw it hit a new all-time high (ATH) of $111,953 nearly a week ago. Since reaching this new ATH, Bitcoin has moved sideways, trading between the $106,800-$109,700 levels.

Analyst Crypto Jelle considers that Bitcoin’s trend into price discovery remains “intact,” pointing out that price has been consolidating above the previous highs. According to Jelle, the cryptocurrency is currently forming a symmetrical triangle pattern in the lower timeframes, with the upper boundary sitting between the $109,000-$110,000 mark. This pattern suggests that Bitcoin is “building pressure for the next leg higher,” with a breakout propelling the cryptocurrency to another 30% rally. Jelle previously highlighted a Power of 3 (Po3) formation in BTC’s chart, suggesting that its price expansion targets the $140,000-$150,000 level after reclaiming the new ATH resistance.

Ali Martinez stated that BTC remains “range-bound” despite the recent price drop, but added that the range’s low is the key level to watch. He warned that a breakdown below the $106,800 support could trigger increased volatility, which might send BTC’s price to lower levels. Titan of Crypto also affirmed that Bitcoin currently sits at a key level, stating that BTC is “still hovering around the daily Tenkan,” which is the level to watch during the potential volatility from the FOMC Minutes. A breakdown from this support zone could send the cryptocurrency’s price to the next key support at around the $102,700 mark. On the contrary, holding the current levels could set the stage for a new retest of the range’s upper boundary.

Meanwhile, Daan Crypto Trades noted that as Bitcoin consolidates near ATHs, BTC-based exchange-traded funds (ETFs) have seen significant inflows over the past few weeks, recording their second-best performance last week. According to Daan, one of the cycle’s better “indicators” to determine strength or weakness at local tops or bottoms has been the ETF flows. Generally, big inflows after a big run, while BTC’s price doesn’t continue its rally, have suggested a local top. Daan considers that if the massive inflows stop and BTC’s price holds, then its short-term performance will likely continue. However, if price doesn’t hold its current range, “we might need to see a bit of a flush & panic first before the proper breakout move.”