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Bitcoin (BTC) dipped as low as $59,500 on Binance ahead of tomorrows Federal Open Market Committee (FOMC) meeting. Market participants are bracing for a hawkish stance from the Federal Reserve (Fed), with expectations set for unchanged interest rates.

The CME FedWatch Tool indicates a mere 4.4% of economists predict a rate cutthe first in over a decadewhile a dominant 95.6% anticipate rates to hold steady between 525-550 basis points.

According to The Kobeissi Letter, current market data indicates a 36% probability that there will be no interest rate cuts this year. Four months ago, the likelihood of maintaining current rates was only about 3%.

Expectations have also shifted to just one reduction this year. Previously, the market anticipated six rate cuts. Additionally, the probability of experiencing two or more rate cuts has diminished to 31%.

Amidst this financial climate, the US grapples with stagflation risks as inflation persists and economic growth slows.

The first quarter of 2024 saw GDP growth decelerate to 1.6%, falling short of the 2.2% forecast and down from the previous quarters 3.4%. Concurrently, the US Core PCE inflation index climbed from 2.0% to 3.7%.

Fed Chair Jerome Powell stated that recent data does not make the Fed more confident, suggesting a longer timeline to regain economic stability. He expressed belief in the adequacy of current policies to navigate the risks at hand, hinting at sustained high-interest rates without increases.

Bitcoins trajectory mirrored these economic uncertainties, dropping below $62,000 earlier in the week due to renewed stagflation worries.

A brief rally above $64,000 occurred with the launch of spot Bitcoin and Ethereum ETFs in Hong Kong yesterday, but the momentum was short-lived as investor caution set in ahead of the Feds key decision.

The market also observed a notable slowdown in spot Bitcoin ETF inflows, with BlackRocks iShares Bitcoin Trust (IBIT) pausing new inflows for several daysa first since its debut. Meanwhile, other funds have seen continued outflows, including Grayscale Investments.

Bitcoins price has been static since the fourth halving event. According to data from CoinGecko, Bitcoin is currently trading at around $60,100, down over 6% in the last 24 hours, and will likely end its continuous growth streak, which has lasted since last September.

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Bitcoin price wobbles ahead of Fed's rate decision - Crypto Briefing