Bitcoin retreats from six-week high ahead of Fed rate decision
Bitcoin retreated from a six-week peak as global markets experienced a risk-off sentiment due to escalating Iran tensions. The cryptocurrency fell approximately 4.5% to $71,200, with Ether and Solana also declining. Rising oil prices are fueling i...
By Agencies |
Agencies
Cryptocurrencies traditionally do better in low interest rate environments, which often prompt investors to turn to risker assets to bolster returns.
Bitcoin pulled back from a six-week high ahead of the Federal Reserve's rate decision, with escalating tensions in Iran triggering a wider risk-off move across global markets.
The largest cryptocurrency dropped about 4.5% on Wednesday to around $71,200 in New York. Earlier this week, Bitcoin climbed to nearly $76,000 - its highest level since the start of February. Smaller, more volatile tokens also declined, with Ether and Solana each falling more than 6%. The drop reflects growing caution among traders, as rising oil prices risk fueling inflation and complicating the Fed's outlook.
"The macro pendulum is swinging towards a rising inflationary environment, thus slimming the chance of rate cuts," said Paul Howard, senior director at Wincent.
Cryptocurrencies traditionally do better in low interest rate environments, which often prompt investors to turn to risker assets to bolster returns.
"Expect investors to scrutinise the individual dot submissions and dissent vote count as the cleaner read on the committee's true disposition," Jasper De Maere of Wintermute. "A hawkish surprise here, whether through revised inflation projections or fewer expected cuts, has the potential to reprice risk assets quickly including crypto."
The largest cryptocurrency dropped about 4.5% on Wednesday to around $71,200 in New York. Earlier this week, Bitcoin climbed to nearly $76,000 - its highest level since the start of February. Smaller, more volatile tokens also declined, with Ether and Solana each falling more than 6%. The drop reflects growing caution among traders, as rising oil prices risk fueling inflation and complicating the Fed's outlook.
"The macro pendulum is swinging towards a rising inflationary environment, thus slimming the chance of rate cuts," said Paul Howard, senior director at Wincent.
Cryptocurrencies traditionally do better in low interest rate environments, which often prompt investors to turn to risker assets to bolster returns.
"Expect investors to scrutinise the individual dot submissions and dissent vote count as the cleaner read on the committee's true disposition," Jasper De Maere of Wintermute. "A hawkish surprise here, whether through revised inflation projections or fewer expected cuts, has the potential to reprice risk assets quickly including crypto."
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