Bitcoin Slumps on Rate Hike Fears Amid Fed Decision Looming

Bitcoin weakened in early Asia trading on Tuesday as investors grew anxious about the prospect of higher interest rates. The largest cryptocurrency fell to $63,414, its lowest level in 11 days, with some traders expecting a rate hike by the US Federal Reserve.

Citadel Securities predicts the Fed will raise rates by a quarter percentage point on Wednesday, citing it would strengthen Chairman Kevin Warsh's credibility in battling inflation. While the chance of a rate hike is seen as roughly one-in-three, rising borrowing costs tend to drive investors away from risk assets like cryptocurrencies.

Caroline Mauron, co-founder of Orbit Markets, attributed Bitcoin's decline to 'macro concerns about AI-related credit risks' and said that support levels around $60,000 should be watched closely. The next level on the downside for Bitcoin is expected to be $62,000.