Despite struggling to keep its head above $22,800 on Sunday, Bitcoin plunged on Monday to as low as $21,400 during the Asian Market session as traders took a risk off-approach ahead of this week’s interest rate decision by the FED.

Mid-last week, the price managed to tap $24,300, recording a one-month high, before that bullish strength was sapped towards the weekend. As of writing, the world’s largest cryptocurrency by market capitalization had recovered to $21,831 despite a 2.81% drop in the past 24 hours.

Ethereum, the second largest crypto by market cap, also plunged by over 5% in the past day to trade at $1,513. Other cryptos that have dived at this week’s start include (XRP), Cardano (ADA), Solana (SOL), and Dogecoin (DOGE), which are down, 4.56%, 7.40%, 5.57%, and 5.19% respectively according to data from CoinMarketCap.

The global crypto market cap has also receded to $1.01T after a 3.60% descent in the past day. Despite improving in the past thirty days, the fear and greed index remains in the fear territory, reflecting investor sentiments around factors that could potentially affect cryptocurrencies.

FOMC Meeting

With the European Central Bank claiming the spotlight last week with a 50 basis points interest rate hike, this week, the U.S. central bank is also expected to hike by at least 75 basis points to tackle the ballooning inflation. 

On Wednesday, the U.S. central bank’s Federal Open Markets Committee (FOMC) is expected to issue a statement, followed by a press conference by Fed Chair Jeremy Powell. This week’s events are key as they will enable investors to gauge if the rate hike, as well as other forward-looking plans by the Fed, will plunge financial markets further or become a major driver of a global recession.

Overall, markets haven’t improved since June’s meeting, and investors remain worried that this week’s FOMC announcement could plunge Bitcoin and other cryptos further.

“Data since has told that inflation continues to run hot and that the US employment market is holding strong. The fed can and will keep pushing until something breaks.” Tedtalksmacro wrote.

Despite BTC’s fundamentals improving in the past few weeks, experts warn that the price could get shaken in the short term, with its most important support of $22,000 facing the risk of being taken out. “Price Predictions,” a website specializing in crypto, forecasts that Bitcoin could fall to a minimum price of $21,420 in July while averaging $23,628 as the month closes.

Data from crypto analytics platform Santiment also suggests that crypto prices may continue to fall before the FOMC meeting, with Ethereum’s sentiment dropping into Super negative territory once again.