Bitcoin declined for a second consecutive session on Wednesday as traders adopted a cautious stance ahead of the Federal Reserve’s policy decision.
In addition to the economic projections, the new Fed Chair Kevin Warsh’s press conference could have a strong impact on sentiment and prices.
While markets expect interest rates to remain unchanged, any indication that policymakers are more concerned about inflation could drive yields higher and increase pressure on risk assets such as Bitcoin.
Conversely, a more dovish tone could provide support for the cryptocurrency.
However, institutional demand remains weak. Despite the improvement in global risk sentiment, Bitcoin has struggled to recover. Spot Bitcoin ETFs attracted only USD 10 million in inflows on Tuesday, a figure that does little to offset the broader trend of outflows. Since the beginning of the month, net ETF outflows have exceeded USD 2 billion, in addition to another USD 2.4 billion in May. Ethereum continues to face a similar issue.
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