Bitcoin experienced a modest rebound, climbing back to nearly $65,000 from its recent overnight lows, after witnessing a dip of over 15% from its record high last week. However, the upcoming Federal Reserve meeting has cast a shadow of uncertainty over the cryptocurrency market, with investors anxiously waiting to see if the correction is truly over.

Following a surge to new all-time highs in previous weeks, Bitcoin faced a steep decline, slipping from just under $74,000 on Thursday to below $63,000 on Tuesday. This downward trend also affected other digital assets, dragging their prices lower.

The correction appears to have been triggered by higher-than-expected inflation readings in the United States, which could deter the central bank from implementing monetary policy easing measures and delay potential interest rate cuts. Market participants are closely watching the Fed's decision regarding adjustments to the dot plot, which outlines committee members' projections for interest rates over the upcoming year. This information provides crucial insights into policymakers' expectations and shapes investors' sentiment.

Concerns surrounding the Fed's meeting have also influenced investor behavior in U.S.-listed bitcoin Exchange-Traded Funds (ETFs), resulting in disappointing flows in recent days. Investors have been cautious about taking risks ahead of the Federal Open Market Committee (FOMC) meeting's conclusion.

Experts warn that a more hawkish stance from the Federal Reserve could dampen investors' interest in risk assets like cryptocurrencies, potentially prolonging the ongoing market correction. Joel Kruger, a market strategist at LMAX Group, highlighted the risk posed by the Fed's decision, emphasizing concerns over a less investor-friendly policy due to strong U.S. economic data and persistent inflation.

As of now, Bitcoin has rebounded to approximately $64,500, showing a recovery from its earlier low of below $63,000. However, it still remains down 3.5% over the past 24 hours. The broader CoinDesk 20 Index (CD20), representing the overall cryptocurrency market, also experienced a decline of nearly 5% during the same period.

All eyes are now on the Federal Reserve as investors eagerly await their decision, which will likely have a significant impact on the future direction of cryptocurrency prices. The outcome of this meeting could either confirm the end of the recent correction or further extend the uncertainty surrounding the crypto market.