Bitcoin opened Tuesday at $63,706 but quickly slid to $63,327 as traders reduced exposure ahead of the Federal Reserve's policy decision due Wednesday. The move lower came amid a cocktail of selling pressure: leveraged liquidations, spot ETF outflows, and lingering uncertainty about interest-rate expectations.
What drove the sell-off
The dip wasn't a single flash crash but a grinding decline through the session. Leveraged long positions got squeezed as the price slipped, forcing more liquidations and adding to the downward momentum. At the same time, spot Bitcoin ETFs saw net outflows — a sign that institutional investors were trimming positions rather than buying the dip. The broader macro backdrop didn't help: traders are still trying to price in where rates are headed, and that ambiguity kept risk appetite in check.
Fed decision in focus
All eyes are now on Wednesday, when the Federal Reserve will announce its latest interest-rate decision and release updated economic projections. Markets are also waiting for comments from Kevin Warsh, who is set to speak after the announcement. Warsh's remarks could offer clues on the central bank's thinking about inflation, growth, and the path for rates — all of which matter for crypto's near-term direction.
The $63,300 level held as support on Tuesday, but the real test comes Wednesday afternoon. If the Fed signals a hawkish pause or hints at further tightening, Bitcoin could break below that floor. A dovish surprise, on the other hand, might spark a relief rally. For now, traders are sitting on their hands, waiting for the catalyst that will set the tone for the rest of the week.
