Bitcoin Slumps to Two-Week Low Amid Fed Rate Hike Concerns

Bitcoin (BTC) fell by over 3% on Tuesday, reaching its lowest point in two weeks at $63,494. This decline coincided with a sharp drop in South Korea's KOSPI index, which plummeted over 10%. The market downturn led to widespread selling pressure across technology equities focused on artificial intelligence (AI), causing ripple effects in digital assets.

The Federal Reserve's upcoming policy announcement is also weighing heavily on sentiment. Market participants assign a 38% probability to an unexpected rate increase this week, while the likelihood of a September hike exceeds 80%. Elevated interest rates typically make non-yielding assets like Bitcoin less attractive, further dampening its price.

Despite the decline, large wallet addresses holding between 10 and 10,000 BTC accumulated approximately 20,000 BTC over an eight-day period. This accumulation is often seen as a bullish sign, indicating that key stakeholders are building positions in the market. Technical expert Michaël Van de Poppe noted that Bitcoin's ability to maintain crucial moving average support levels at $64,289 and $63,261 represents a strong signal for the markets to be betting on the long side.