On escalating concerns about rising interest rates, bitcoin momentarily fell below US$42,000 (S$57,000) for the first time since March 23, returning to the range it has traded this year.
In Asia on Monday morning (April 11), the largest cryptocurrency fell as low as US$41,918 for the sixth day in a row.
Concerns about tighter monetary policy have pulled Bitcoin – and other tokens – lower since peaking well above US$48,000 in late March. Even the enthusiasm generated by last week’s Bitcoin 2022 conference in Miami failed to halt the downward trend.
Inflation Affecting Crypto
Inflation in the United States likely accelerated to 8.4 percent in March, the fastest pace since early 1982, economists surveyed ahead of data due on Tuesday predicted.
The Federal Reserve may need to hike interest rates above 4 percent, Goldman Sachs chief economist Jan Hatzius said on Friday.
Expectations for tighter monetary policy have hurt demand for riskier assets such as cryptocurrencies and tech stocks, which are increasingly moving in tandem.
“Now that the sugar rush of Bitcoin 2022 has passed, Tuesday’s (likely) ugly US consumer price report is a reminder that the Fed is caught between a rock and a hard place when it comes to tackling runaway inflation
Without sinking the economy,” said Mr. Antoni Trenchev, managing partner of crypto lender Nexo, in e-mailed comments.
Bitcoin also fell below its 50-day moving average for a brief period. At 9.40 a.m. in Hong Kong, the token was trading at US$42,270, down about 2% on the day. Ether fell 2.8 percent to $3,196 USD.
The stock market was mixed. China’s stock markets fell dramatically, while Australian and Japanese stocks remained relatively unchanged.
For most of the year, Bitcoin has traded in a band of roughly US$35,000 to US$45,000 per coin. The coin briefly recovered its losses for the year after breaking above US$48,000 last month, but it ran into resistance around its 200-day moving average.