Bitcoin price fell on Monday as sentiment towards cryptocurrencies remained dour in the face of higher-for-longer U.S. interest rates, while changes to collateral rules by the DTCC also presented some headwinds for crypto.
Bitcoin fell 2.5% over the past 24 hours to $62,314.6 by 01:37 ET (05:37 GMT). The token was now trending closer to the lower end of a $60,000 to $70,000 trading range established since mid-March.
DTCC revokes collateral for Bitcoin, crypto
The Depository Trust & Clearing Corporation (DTCC), a major private financial markets clearing and settlement services provider, said it will no longer allocate collateral to exchange-traded funds or any other investment funds with exposure to Bitcoin and crypto.
The move will be effective from April 30, and dampens the appeal of crypto, which usually serves as a major vehicle for speculation.
Rate fears quash Bitcoin price, Fed awaited
The DTCC decision spurred extended losses in Bitcoin, which was already nursing losses over the past week. Fears of higher-for-longer U.S. interest rates were the biggest weight on Bitcoin in recent sessions, given that the token and the broader crypto space usually benefit from a low-rate, high-liquidity environment.
Hotter-than-expected PCE price index data- which is the Fed’s preferred inflation gauge- was the latest point of pressure for crypto markets. Sticky inflation has been the central bank’s biggest point of contention over cutting interest rates, with inflation readings for the past three months giving the Fed little confidence to cut rates.
Focus was now squarely on a Fed meeting later this week for more cues on rates. The central bank is widely expected to keep rates unchanged.
The Fed is now only expected to begin cutting rates by September or in the fourth quarter.
Crypto price today: altcoins track Bitcoin losses
Major altcoins also tracked losses in Bitcoin, as sentiment towards crypto remained dour. World no.2 token Ethereum fell 3.4% to $3,202.01, while XRP and Solana lost 3% and 4.5%, respectively.
Crypto prices took little support from gains in technology stocks, following stronger-than-expected earnings from U.S. tech titans Microsoft Corporation (NASDAQ:MSFT) and Google parent Alphabet Inc (NASDAQ:GOOGL).
While crypto usually moves in tandem with U.S. tech, that correlation has somewhat changed in recent months, with crypto prices seeing limited upside from gains in tech stocks.
Instead, risk-off sentiment in tech was seen triggering extended declines in crypto in recent sessions. – Investing.com
