Bitcoin fell to $77,000 as traders prepared for a week of Federal Reserve decisions and major US economic data. Rising oil prices, tight labor supply, and AI energy demand could push inflation higher, potentially forcing the Fed to maintain a tight monetary policy for longer. Analysts warn that if inflation rises, Bitcoin may stay capped until markets reprice rate expectations.
In a MarketWatch column, Craig R. Torres and Fabio Natalucci noted the Federal Reserve needs to update its message because higher US inflation is likely ahead. They pointed to several pressures including rising oil prices and tight labor supply.
Bitcoin price was just $500 shy of $80,000 at its peak last week, but has since retreated over 3%. It briefly dipped below $76,000 in the last 24 hours. Analysts believe this retracement reflects investors taking profits ahead of the FOMC meeting. The current consensus is that the Federal Reserve will maintain a steady rate of 3.75%.
Crypto analyst and MN Fund founder Michael Van De Poppe stated that such pullbacks tend to occur before FOMC events. He believes BTC price will likely resume its upside if it stays above $73,000, but hinted a deeper pullback might occur if it slides below that level. Analysts expect the market to remain flat if the Fed announces 3.75% rates, prices may crash if rates rise to 4%, and a rally could be on the cards if rates drop to 3.5%.
Polymarket predicted BTC price would drop to $70,000 on April 29, signaling bearish sentiment. Stablecoin outflows on exchanges surged to historic highs according to CryptoQuant, suggesting declining buying pressure and whales potentially taking profits. CryptoOnchain analysis indicated whales were transferring their dry powder, not intending to buy on exchanges soon.
Bitcoin has benefited from healthy demand from institutional players, ETFs, and accumulating addresses building a solid floor, but rising inflation and higher rates could undermine its ability to push past $80,000.
