An image of Bitcoin and US currency displayed on a screen during the Interpol World Conference in Singapore on July 4, 2017.
Roslan Rahman | AFP | Getty Images
Cryptocurrencies fell on Tuesday as the broader market fell following a higher-than-expected CPI.
Bitcoin fell 3% to $48,535.17, according to Coin Metrics. The day before, it had surpassed the $50,000 mark, its highest price in more than two years.
The move comes after the U.S. Bureau of Labor Statistics reported that the consumer price index rose more sharply in January than economists surveyed by Dow Jones expected. The report sent yields higher, pushing the benchmark 10-year Treasury yield up 10 basis points and raising concerns that the Federal Reserve might not be able to cut rates as many times this year as previously expected. As a result, risk assets were under pressure.
“We expect the crypto rally to continue for the foreseeable future,” said Nico Cordeiro, chief investment officer at Strix Leviathan. “However, if inflation continues to be higher than expected, investors should expect a secular downturn, which tends to run counter to the prevailing belief that Bitcoin is an inflation hedge.”
He also said he believes Bitcoin is not an inflation hedge, but rather a measure of liquidity within the financial system.
See chart…
Bitcoin falls to key $48,000 level
Cryptocurrency exchange Coinbase fell 4%, and Bitcoin agency MicroStrategy fell 5%. The Miners also suffered a loss, although it was mild compared to the previous day's double-digit gain. CleanSpark and Iris Energy each fell 4%. Marathon Digital fell 9% and Riot Platforms fell 5%.
Bitcoin remains hovering around $48,600, a level that investors and chart analysts are paying close attention to. Multiple closes above this could support new highs above $50,000 and create new all-time highs. This coin hit a record of $68,982.20 on November 10, 2021.
Elsewhere, Ether and Solana’s SOL tokens outperformed and remained just above the flat line after deducting previous gains.
Yuya Hasegawa, a cryptocurrency market analyst at Japanese Bitcoin exchange BitBank, said Ethereum led the cryptocurrency rally, rising 5.5% on Monday to a one-month high. He said the price is being driven up by expectations for Ethereum's next major technology upgrade, Dencun, in March, as well as renewed interest in NFTs (non-fungible tokens) from the crypto community. Stated.
“Prices may be ripe for a slight correction in the next week or so, but the uptrend is likely to continue due to improved demand through ETFs and technical sentiment,” he added.
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