Tech and Science

Bitcoin crashes by $5,000 in 24 hours as interest rates rise

A Bitcoin can be seen on a screen showing the Bitcoin to US dollar exchange rate.

Fernando Gutierrez Juarez | picture alliance | Getty Images

Bitcoin Prices fell for a second day at the start of the new month and quarter, driven by rising Treasury yields and a strong U.S. dollar.

According to Coin Metrics, the flagship cryptocurrency fell more than 6% to $65,150.00 on Tuesday, extending its two-day loss to about 7%. It was trading around $70,000 on Monday morning, ahead of the release of data showing manufacturing growth for the first time since September 2022 and investors’ bets on rate cuts in June faded. Bitcoin is now about 11% below its all-time high reached on March 14th.

ether fell, losing 6% and trading at $3,240.27.

Now it is 10-year US Treasury bond yield reached its highest level of the year and the dollarwhich is inversely related to Bitcoin, reached its highest level in almost five months.

Stock chart iconStock chart icon

Hide content

Bitcoin (BTC) is falling from April

“Bitcoin doesn’t need much of an excuse to go through a correction phase after such an explosive performance in the first quarter,” said Joel Kruger, market strategist at LMAX Group. “However, US economic data has been better recently, while inflation remains a concern. This has led to a reassessment of Fed expectations, which is reflected in broad-based US dollar demand due to more attractive US dollar yield differentials.”

The Bitcoin movement may have been exacerbated by a major Bitcoin holder, a “whale,” who transferred more than 4,000 Bitcoin to the Bitfinex exchange late Monday evening. Data from CryptoQuant shows an increase in this exchange’s reserves, which usually indicates a surge in selling activity that coincides with the sudden drop in the price of Bitcoin late Monday evening.

Stocks tied to Bitcoin’s performance were dragged lower. Crypto exchange Coinbase fell 4%, while software provider Microstrategy, which largely trade as a proxy for Bitcoin’s price, lost nearly 7%. The largest mining stocks, Marathon Digital And Riot Platformslost 7% and 6% respectively. CleanSparkone of the best-performing miners this year, slipped 6%.

April could be turbulent for crypto and related stocks – especially mining stocks. Investors expect the Bitcoin halving in the second half of the month, which will reduce the reward and therefore the income of Bitcoin miners. The event could impact miners’ performance, but has historically resulted in Bitcoin seeing a surge of 300% or more in the following months.

Bitcoin is still up 53% for 2024.

Don’t miss these stories from CNBC PRO:

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button