Bitcoin Plunges to 11-Day Low Amid Rate Hike Fears
The Bitcoin price has plummeted to an 11-day low after expectations of a Federal Reserve rate hike intensified. On Tuesday, during early Asian trading, Bitcoin fell as much as 2.3% to $63,414. Ethereum, the second-largest cryptocurrency by market capitalization, declined by 3.6%. The rise in rate hike expectations ahead of the Fed's policy decision on July 29 has put pressure on risk assets like cryptocurrencies.
The Federal Reserve will meet on July 28-29 to announce its interest rate decision. While markets widely expect the Fed to keep rates unchanged, Citadel Securities expects a 25-basis-point hike, which would be a surprising move. Traders currently price in about a one-in-three chance of a rate hike.
NVIDIA's new round of AI infrastructure deals, worth over $750 billion, has heightened concerns about the company's potential financial risks and credit risks linked to artificial intelligence. Caroline Mollen, co-founder of Orbit Markets, stated that 'Bitcoin is primarily being pressured by rising expectations of a Fed rate hike and concerns over credit risks linked to artificial intelligence.'
The next key downside target for Bitcoin is $62,000, with strong support expected around the $60,000 level. Analysts note that if passed, the Clarity Act would move the crypto industry out of a 'gray area' toward formal compliance, enabling traditional financial institutions to directly engage in custody and trading of digital commodities.