Bitcoin Tumbles as Rate Hike Fears Overshadow Crypto Momentum
Bitcoin prices dropped in early Asia trading on Tuesday as investors worried about potential higher interest rates from the US Federal Reserve. The largest cryptocurrency fell by up to 2.3% to $63,414 in Singapore, its lowest level in 11 days.
The second-largest token Ether declined by 3.6%. Citadel Securities expects a quarter percentage point rate hike on Wednesday, which would strengthen Chairman Kevin Warsh's credibility in the fight against inflation. A roughly one-in-three chance of a rate increase is seen among traders.
Rising borrowing costs tend to push investors away from risk assets like cryptocurrencies. Caroline Mauron, co-founder of Orbit Markets, said Bitcoin is being hit by 'macro concerns about AI-related credit risks.' The next level of support on the downside is expected at $62,000, with strong support around $60,000.