Bitcoin 4% Slide Explained: What’s Coming Tomorrow?

• Bitcoin price drops over 4% amid political tensions and a significant $2 billion Bitcoin transfer by the Biden administration.
• The total crypto market cap falls 3%, leading to $167 million in liquidations, primarily affecting long traders.
• Bitcoin’s volatility is expected to rise ahead of the Federal funds rate announcement, with potential support at $60K.

Bitcoin, the flagship cryptocurrency, has recently experienced a notable price drop of over 4%. This decline comes just before the release of high-impact news expected tomorrow. In this article, we will explore the potential reasons behind this price movement and what it could mean for the future of Bitcoin.

Bitcoin’s (BTC) price fell over 4 percent in the last 24 hours, trading around $65,730 on Tuesday morning in Europe. The total crypto market cap dropped by about 3 percent in the same period, now at around $2.51 trillion. As a result, over $167 million was liquidated from the entire crypto derivatives market, mainly affecting long traders.

Bitcoin’s price has benefited from the recent approval of spot Bitcoin ETFs in the US. However, political disagreements between the top two US parties on cryptocurrency issues have created uncertainty

Just days after former President Donald Trump expressed support for Bitcoin and vowed not to sell any of his holdings, the Biden administration transferred over $2 billion worth of Bitcoin. This move involved nearly 30,000 Bitcoins and was seen by some as a negative signal to crypto investors. Mike Novogratz, CEO of Galaxy Digital, criticized the move in his X account calling it a dump thing.

However, when it comes to the Democratic ticket, the current White House hopeful Kamala Harris is said to be considering Michigan Senator Gary Peters as her vice. Peters does not support cryptocurrencies and co-sponsored the Digital Asset Money Laundering Act in 2023. 

Ahead of tomorrow’s Federal funds rate, Bitcoin price is expected to lead the crypto industry in heightened volatility. Meanwhile, long-term investors led by BlackRock Inc the largest asset manager have continuously accumulated irrespective of the heightened volatility. Moreover, Bitcoin has offered investors a way out from global fiat inflation, whereby the US debt just crossed $35 trillion.

From a technical standpoint, Bitcoin price is likely to drop towards the support level of around $60K before rebounding to a new all-time high before the end of this year. In case Bitcoin price slips below $60K again, the flagship coin will likely retrace towards $52K.