Apr 16 2024: Bitcoin prices fell on Tuesday as market sentiment remained cautious due to expectations of prolonged U.S. interest rates and ongoing geopolitical tensions in the Middle East.
The dollar’s ascent to a five-month high added pressure on cryptocurrencies, with Bitcoin dropping 3.6% to $62,555.0. Investors favored traditional safe havens like the dollar and gold amidst the risk-off environment.
While Hong Kong regulators approved spot crypto exchange-traded funds (ETFs), offering some exposure to crypto markets for local and Chinese investors, the news failed to significantly lift market sentiment given prevailing risk aversion.
The approval of spot crypto ETFs in the U.S. earlier had sparked a notable rally in Bitcoin, but recent cooling enthusiasm and slowing capital flows suggest a more subdued response in Hong Kong.
In broader crypto markets, Ethereum, XRP, and Solana experienced declines of 2.9%, 2.1%, and 9.8%, respectively, reflecting the overall cautious stance among investors.
The weekend’s flash crash, triggered by an Iranian strike against Israel, had initially led to market jitters, although subsequent reports indicating minimal damage tempered the impact.
However, renewed tensions between Israel and Iran, alongside hotter-than-expected U.S. retail sales data and anticipation of a speech by Fed Chair Jerome Powell, continued to weigh on market sentiment.
CoinShares’ data revealing outflows from crypto investment products further highlighted the cautious approach of traders towards speculative assets in the current risk-averse environment.
