Why is Bitcoin price down today?

Source: Cointelegraph

Bitcoin BTC $57,631 price is giving up some of the gains it secured recently, primarily as traders become more focused on what will happen to the United States economy after the Federal Reserve’s interest rate decision this week.

Macroeconomic catalysts push Bitcoin price down

As of Sept. 16, the BTC price had fallen by 1.80% to around $58,125, continuing its depreciation from the local high of $60,670, established four days ago.

BTC/USD daily price chart. Source: TradingView

However, the long bearish wick on the latest daily candlestick suggests bullish rejection, indicating that the recent downturn was likely driven by short-term traders taking profits ahead of the Federal Open Market Committee (FOMC) meeting on Sept. 18-19.

Fed officials are expected to cut the benchmark lending rate by at least a quarter percentage point when they conclude their two-day meeting on Wednesday. That is due to the recent US Consumer Price Index (CPI) data, which shows inflation seemingly under control and signs of weakness emerging in the labor market.

Target rate probabilities for the September Fed meeting. Source: CME

Lower rates are considerably bullish for riskier, non-yielding assets like Bitcoin. However, crypto traders are practicing caution before the Fed decision, and the Bank of Japan braces to raise interest rates at their meeting on Sept. 20, just a day after the Fed’s decision.

The caution is linked to the “yen carry trade” and its potential impact on Bitcoin. This trading strategy involves borrowing yen at low interest rates to invest in higher-yielding assets. If the Bank of Japan raises interest rates, the cost of borrowing yen will increase, potentially leading to an unwinding of these trades.

JPY/USD daily price chart. Source: TradingView

This could result in selling pressure on riskier assets like Bitcoin, similar to what happened in early August.

Therefore, while a rate cut from the Fed could be bullish for Bitcoin, the uncertainty around the Bank of Japan’s decision introduces a layer of risk, prompting traders to remain cautious until both central bank meetings conclude.

Bitcoin exchanges, miners add sell pressure

Bitcoin’s decline today further accompanies a rise in the BTC balances across all exchanges, according to Glassnode data.

As of Sept. 16, the total number of BTC held by exchanges was over 3.019 million, compared to around 3 million on Aug. 29. The rise indicates traders’ growing BTC transfers to exchanges, which can add sell pressure.

Bitcoin balance on exchanges. Source: Glassnode

Signs of distress may continue to emerge from the Bitcoin mining community, especially as BTC accumulation slows —as shown in the chart below—after recording their lowest revenues in almost a year in September.

Bitcoin miner net position change. Source: Glassnode

When miners’ revenues decline, they might need to sell more of their mined Bitcoin to cover expenses, such as electricity and equipment costs.

BTC price technical correction

From a technical viewpoint, Bitcoin’s price decline today is an extension of a prevailing correction trend. It began after BTC tested the upper trendline of its current descending triangle range as resistance, akin to its previous corrections after testing the same level.

BTC/USD daily price chart. Source: TradingView

As a result, BTC’s price target for September appears to be around the lower trendline of its descending triangle channel, aligning with the $52,500-$53,000 area.

Conversely, a return above the 50-day (the red wave) and 200-day (the blue wave) exponential moving averages could invalidate the downside setup.

Instead, the price will likely break above the triangle’s upper trendline to pursue a run-up toward $65,000, its resistance level from August.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessar