Bitcoin Retreats Ahead of FOMC Meeting as Institutional Support Tests $70,000 Level

Bitcoin (BTC) has pulled back from a local high of $79,500, reflecting a broader market trend of risk aversion leading up to the Federal Open Market Committee (FOMC) policy decision this Wednesday. This price action aligns with historical patterns where volatility spikes surrounding central bank meetings. Data indicates that since the start of 2025, BTC has corrected in seven out of ten instances following interest rate cuts. Seven-day returns during these periods have fluctuated significantly, ranging from +6.92% to -29.57%. Analysts suggest that current price movements are driven more by shifts in liquidity and leverage than the specific rate outcomes. Previous deleveraging phases have highlighted this sensitivity; during one notable drawdown, futures open interest fell from $61 billion to $49 billion in a single week. This triggered an estimated $2.5 billion in BTC-specific liquidations, contributing to a total crypto liquidation event of $4.5 billion. However, a strong structural bid remains evident through corporate and institutional activity. Strategy has aggressively expanded its balance sheet in 2026, increasing its total holdings to 818,334 BTC from 672,497 on January 1. These acquisitions were partially funded through equity-linked instruments. Further supporting the asset are spot Bitcoin ETFs, which have recorded approximately $3.5 billion in net inflows over the past two months. This renewed institutional participation has helped establish key support levels at $60,000, $65,000, and $70,000, potentially cushioning the market against deeper macro-driven drawdowns.