$Bitcoin(BTC.CC)$, $Ethereum(ETH.CC)$ and$Dogecoin(DOGE.CC)$ appeared to be under pressure at press time, as the global cryptocurrency market cap inched down 0.05% to $1.7 trillion ahead of a key policy meeting of the U.S. Federal Reserve.

Why It Matters: Cryptocurrencies lost upward momentum along with U.S. futures. The S&P 500 and Nasdaq futures were down 0.07% and 0.15%, respectively, at press time.

The 10-year Treasury yield hit a high of 3.01% during Monday's session touching levels not seen since Dec. 3, 2018, according to a CNBC report. 

Ahead of The Federal Open Market Committee meeting on Wednesday, where investors are watching for a possible 75 basis point interest rate hike, the dollar index —  a measure of the U.S. unit's strength against six other currencies —  shot up to 103.72, the highest since December 2002, according to a Reuters report. 

The market has priced in a strong start to the rate hiking cycle, but the big question is how aggressive they will be with quantitative tightening. What will determine if the FOMC decision is hawkish is if Q/T is closer to $70 billion a month, with a cap around $50 billion being somewhat dovish." 

- said Edward Moya, a senior market analyst with OANDA. 

Amid the Federal Reserve action, Bitcoin could see further pain, according to Moya. 

The $35,000 level should provide major support for Bitcoin, but if the Fed delivers a major de-risking moment downside could target the $30,000 region."

- said the analyst, in a note seen by Benzinga.

Cryptocurrency trader Justin Bennett expects "indecision" to mark the mood of the market leading up to Wednesday's FOMC.

Noting the correlation between the equity markets and Bitcoin in Tuesday's trading, he tweeted, "A good time to do nothing and protect your capital."

Expect indecision leading up to Wednesday's #FOMC. This morning's price action is a perfect example.
A good time to do nothing and protect your capital.$BTC since the US stock market opened:  pic.twitter.com/Q8BP5TklZZ

— Justin Bennett (@JustinBennettFX) May 2, 2022

A very large proportion of Bitcoin investors are peering into the abyss of holding unprofitable positions, creating the potential tinder for a much-discussed capitulation event." 

- said Glassnodein a weekly newsletter.

The on-chain analysis firm noted that BTC would need to fall to $33,600, to plunge an additional 1.9 million digital coins (10% of the supply) into an unrealized loss.

This would reach our example 'pain threshold' of 60% supply in profit and put almost all buyers from the last 16-month cycle into the red." 

- wrote Glassnode. The exception would be buyers of the May to July 2021 lows.

A certain level of fear, uncertainty, and doubt among the crowd is the harbinger of "optimal price rise conditions," tweeted Santiment. 

Exchange funding rates for [Bitcoin] have shown a bias toward [longing] once again after the trading week originally opened with significant profit-taking." 

- said the market intelligence platform.

Exchange funding rates for #Bitcoin have shown a bias toward #longing once again after the trading week originally opened with significant profit taking. We ideally look for a certain level of crowd #FUD for optimal price rise conditions.