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Bitcoin's image. / Reuters, Yonhap

Although Bitcoin prices recently briefly recovered to the $65,000 level, they fell back to the $63,000 range. This was driven by investors adopting a wait-and-see stance ahead of the U.S. Federal Open Market Committee (FOMC) meeting, combined with short-term profit-taking. Experts noted that a range-bound market could continue depending on the direction of interest rates and macroeconomic variables following this FOMC meeting.

According to U.S. crypto exchange Coinbase on July 29, Bitcoin was trading at $63,838 as of 2:30 p.m. that day, up slightly by 0.84% from the previous day. Analysts attribute this to selling pressure erasing most of the gains after a recent recovery to the $65,000 level.

Market observers analyzed this pullback as a dip caused by a wait-and-see market ahead of the FOMC rather than a trend reversal downward. The U.S. Federal Reserve (Fed) is scheduled to announce its FOMC decision on July 29 (local time), and while a benchmark rate freeze is widely expected, how Fed Chair Kevin Warsh outlines the future path of monetary policy is considered a key variable.

The crypto industry is paying closer attention to Chair Warsh's press conference than to the interest rate decision itself. If Chair Warsh signals that a tight stance will be maintained despite slowing inflation, investor sentiment toward risk assets is likely to weaken due to a stronger dollar and rising Treasury yields. Conversely, if he lowers the likelihood of further tightening or hints at room for accommodative policies ahead, it could act favorably for the crypto market, including Bitcoin.

A heavy wave of profit-taking following the recent rebound also contributed to downward price pressure. In the derivatives market as well, investors appeared to prepare for increased volatility rather than making aggressive bets. In the options market, trades reflecting the potential for heightened price volatility around the FOMC decision have been increasing, and the market is expected to react more sensitively to the tone of Chair Warsh's comments than to the policy decision itself.

Experts project that while institutional demand continues to support Bitcoin prices over the medium to long term, short-term volatility will be inevitable following the FOMC meeting.

Geoff Kendrick, head of digital assets research at Standard Chartered, also forecasted in a recent report, "The recent correction could present a buying opportunity for long-term investors," adding, "If institutional inflows and ETF demand persist, Bitcoin is highly likely to see further gains by the end of the year."

On the other hand, Markus Thielen, head of research at 10x Research, said, "Bitcoin remains sensitive to macroeconomic variables and monetary policy," adding, "It is necessary to keep in mind the possibility of continued high volatility even after the FOMC decision and Chair Warsh's press conference."

An official in the domestic crypto industry also analyzed, "Starting from this FOMC, Fed Chair Kevin Warsh's future monetary policy stance, whether inflows into U.S. spot Bitcoin ETFs continue, and shifts in rate expectations for the September FOMC meeting will be key variables determining the direction of the Bitcoin market in the second half of the year."

                                                                                                                Kim Min-ju