Bitcoin came under renewed selling pressure on Tuesday, briefly falling below the $64,000 level as investors reduced exposure ahead of the U.S. Federal Reserve's latest interest rate announcement.
The decline reflects growing caution across financial markets, with traders waiting to see whether policymakers will keep rates unchanged or signal a tougher monetary policy in the coming months.
Bitcoin Struggles to Hold Key Support
During Tuesday's trading session, BTC slipped below an important short-term support trend, trading in the $63,000–$64,000 range.
Although buyers attempted to push the price back above $64,000, the recovery lost momentum, leaving Bitcoin below several technical resistance levels.
Market analysts note that Bitcoin now sits between important support and resistance zones, making the next major move heavily dependent on upcoming macroeconomic developments.
All Eyes on the Federal Reserve
The main event for financial markets this week is the Federal Reserve's interest rate decision.
Most economists expect the central bank to leave interest rates unchanged. However, investors remain cautious because policymakers could deliver a more hawkish message regarding future rate hikes.
Higher interest rates generally strengthen the U.S. dollar while reducing demand for higher-risk assets such as cryptocurrencies.
If the Federal Reserve signals tighter monetary policy, Bitcoin could remain under pressure in the short term. On the other hand, a more neutral outlook could improve market sentiment and support a price recovery.
Bitcoin ETFs Record Another Day of Outflows
Institutional demand also weakened ahead of the Fed meeting.
U.S. spot Bitcoin exchange-traded funds (ETFs) recorded another day of net outflows, marking the third consecutive trading session with investors withdrawing capital.
Among the largest withdrawals were funds managed by BlackRock and Fidelity, suggesting that some institutional investors preferred to reduce exposure before the Federal Reserve's announcement.
While total assets held by Bitcoin ETFs remain substantial, the recent outflows indicate a more cautious approach among professional investors.
Ethereum Shows Relative Strength
Unlike Bitcoin, spot Ethereum ETFs attracted fresh investment during the same trading session.
Although one day of positive inflows does not necessarily indicate a long-term trend, it suggests that some investors temporarily shifted their attention toward Ethereum while waiting for greater clarity on macroeconomic policy.
Technical Levels Traders Are Watching
Several price levels could determine Bitcoin's next move.
If buyers regain momentum, the first major resistance sits between $64,400 and $65,200. A successful breakout above this area could open the door for another attempt to move toward $66,000.
On the downside, analysts are closely watching support around $62,500. If selling pressure increases after the Fed announcement, Bitcoin could test this level before finding stronger buying interest.
Analysts Remain Optimistic Despite the Pullback
Despite the recent correction, some market analysts continue to maintain a bullish outlook.
Several experts believe the current decline is primarily driven by uncertainty surrounding the Federal Reserve rather than a fundamental change in Bitcoin's long-term trend.
If macroeconomic conditions become more favorable and buyers regain control, Bitcoin could recover previous resistance levels during the coming weeks.
However, increased volatility is expected around the Fed announcement as traders react to both the interest rate decision and comments from Federal Reserve officials.
Why This Matters
Bitcoin's latest decline highlights how closely the cryptocurrency market remains connected to global economic events.
Interest rate decisions, inflation expectations, institutional investment flows, and overall market sentiment continue to influence short-term price movements.
While long-term adoption of Bitcoin continues to grow, traders should expect increased volatility whenever major central banks announce monetary policy decisions.
