Bitcoin Move Towards the world’s most valuable cryptocurrency, faced renewed pressure on Monday, edging towards a four-week low. This decline comes as investors steer clear of high-risk assets amid a rebound in US 10-year Treasury yields. The resurgence in yields follows bullish statements from Federal Reserve officials, dampening hopes for multiple rate cuts this year.
Bitcoin’s Recent Performance
Prices
On Monday, Bitcoin fell by 1.65%, or $1101, at Bitstamp, landing at $65,521. The session saw a high of $66,862, reflecting the volatile nature of the cryptocurrency market. This decline marks a shift from Sunday’s slight recovery, where Bitcoin rose by 0.7%, distancing itself from the four-week low of $64,936.
Weekly Trend
Over the past week, Bitcoin lost 4.3%, marking the second weekly loss in three weeks. This decline is primarily attributed to the prospects of US interest rate adjustments, which have influenced investor sentiment and market dynamics.
Impact on the Crypto Market Value
The broader cryptocurrency market also felt the pressure, with the total market value dropping by $50 billion to $2.514 trillion. Both Bitcoin and Ethereum, the two largest cryptocurrencies by market capitalization, saw declines, contributing to the overall market contraction.
The Role of US Yields
Treasury Yields
US 10-year Treasury yields rose by 0.65% on Monday, marking the first profit in five sessions and moving away from ten-week lows at 4.190%. This rebound in yields has significant implications for high-risk assets like cryptocurrencies, as investors often seek safer investments amid rising yields.
Fed’s Influence
Bullish remarks from Federal Reserve officials have played a pivotal role in the market’s movements. Neil Kashkari, the Chair of the Minneapolis Fed
indicated that the most likely scenario involves a single interest rate cut by the Federal Reserve this year, potentially in December. Such statements have tempered expectations for multiple rate cuts, affecting market sentiment.
US Interest Rate Prospects
Current Odds
According to the Fedwatch tool, the probability of a US Fed interest rate cut in September stands at 67%, increasing to 80% in November. These odds reflect the prevailing investor sentiment
which is largely centered around the expectation of a single rate cut this year.
Economic Data Awaited
Investors are now eagerly awaiting a series of important US economic data
including retail sales, PMI, and unemployment claims, later this week. Additionally, several speeches by Fed officials are expected, which could provide further insights into the Federal Reserve’s policy direction.
Upcoming Australian Exchange Funds
In a notable development for the cryptocurrency market, Bitcoin exchange funds are scheduled for launch in Sydney on Thursday. This move represents another regulatory step in favor of crypto trading
potentially boosting market confidence and expanding the accessibility of cryptocurrencies.
Conclusion
Bitcoin move towards a four-week trough highlights the volatile and sensitive nature of the cryptocurrency market
particularly in response to macroeconomic factors like US Treasury yields and Federal Reserve policies. As investors brace for crucial economic data and Fed speeches, the market’s direction remains uncertain. However, regulatory advancements, such as the launch of Bitcoin exchange funds in Australia
offer a glimmer of optimism for the crypto market’s future.
FAQs
What is causing Bitcoin’s recent decline?
Bitcoin’s recent decline primarily driven by a rebound in US 10-year Treasury yields and bullish remarks from Federal Reserve officials
which have dampened hopes for multiple rate cuts this year.
How did the broader cryptocurrency market perform?
The broader cryptocurrency market saw a decline, with the total market value dropping by $50 billion to $2.514 trillion. Both Bitcoin and Ethereum experienced losses, contributing to the overall market contraction.
What are the prospects for US interest rate cuts?
The odds of a US Fed interest rate cut in September are currently at 67%, rising to 80% in November. Investors largely expect a single rate cut this year, likely in December.
What significant economic data is expected this week?
Investors are awaiting important US economic data, including retail sales, PMI, and unemployment claims. Additionally, several Fed officials scheduled to speak, which could influence market sentiment.
What is the significance of the Bitcoin exchange funds launch in Australia?
The launch of Bitcoin Move Towards exchange funds in Sydney represents a significant regulatory step in favor of crypto trading
potentially boosting market confidence and expanding access to cryptocurrencies.