Bitcoin circled $65,000 after downside price pressure into the FOMC meeting, as analysts warned over the impact of Strategy potentially selling more BTC.
Bitcoin (BTC) bounced off week-to-date lows into Wednesday's Wall Street open as corporate sell pressure returned to the radar.
Key points
Bitcoin set a new low for the current weekly candle with the Fed FOMC meeting due in hours.
Analysis warned that markets remain concerned over Strategy potentially selling more BTC.
Fed chair Kevin Warsh faces a tough balancing act at his first interest-rate decision.
Strategy selling still impacting Bitcoin price strength
Data from TradingView showed BTC/USD heading higher after dropping to $64,500 on Bitstamp.
The pair saw ongoing weakness ahead of the US Federal Reserve's interest-rate meeting, scheduled for 2pm Eastern time. Such events tend to trigger BTC price downside.
In its latest Market Color analysis, trading company QCP Capital said that the BTC price outlook was clouded by more than just the Fed.
"While broader markets continue to trade higher on optimism across multiple fronts, BTC remains stuck below the 66k level," the firm wrote. The underperformance had been driven partly by concerns that Strategy may need to sell more Bitcoin to fund dividend payments, especially after buying back $1.5 billion of its 2029 Convertible Senior Notes.
QCP explained that contingency measures by Strategy had "extended its runway" in terms of liquidity after selling 32 BTC in May, but markets remained wary of potential problems further down the line.
"In the short term, we think this overhang may continue to prevent Bitcoin from fully participating in the broader macro optimism. However, as Strategy continues to issue shares and lengthen its runway, that optimism may eventually catch up to BTC," it continued.
"For now, the macro tide has turned more supportive, but Bitcoin still has one very specific overhang to work through," QCP added.
The Fed's Warsh faces a difficult opening act
On the Fed, meanwhile, QCP joined those putting the focus on new Fed chair Kevin Warsh.
"Warsh takes the stage at his first Fed meeting as Chair today," it stressed. Previous expectations had positioned him as dovish and more inclined toward rate cuts, but the economic backdrop had shifted materially.
QCP described a "difficult opening act" for Warsh, who must balance inflationary trends with pressure to cut rates from President Donald Trump.
"Today's meeting will therefore be about more than the rate decision," it continued. "It will be Warsh's first opportunity to secure buy-in from Powell and the rest of the Board, while establishing himself as a credible and independent Fed Chair."
Data from CME Group's FedWatch Tool showed no odds of the Federal Open Market Committee cutting rates.
Andre Dragosch, European head of research at crypto asset manager Bitwise, noted that markets increasingly expected a rate hike by the end of the year — a clear would-be headwind for crypto and risk assets.