June 12 2024: Bitcoin’s price declined on Wednesday, continuing its fall from the previous session as market participants remained cautious ahead of a Federal Reserve meeting and critical inflation data.
The leading cryptocurrency dropped 0.8% over the past 24 hours, reaching $67,372.3 by 01:34 ET (05:34 GMT). It had previously fallen to a low of $66,000 on Tuesday.
Bitcoin Volatility Heightened by Rate Concerns
Bitcoin experienced significant price fluctuations in recent sessions, rising as high as $72,000 as market sentiment towards cryptocurrencies remained uncertain in anticipation of U.S. interest rate signals.
Higher interest rates reduce the attractiveness of riskier assets like cryptocurrencies and present a challenging environment by limiting liquidity. Consequently, traders shifted away from Bitcoin and other cryptocurrencies this week, moving towards assets more resilient to interest rate concerns, such as the dollar.
Despite data indicating $2 billion in inflows into Bitcoin and other crypto investment products in the first week of June, this was not reflected in Bitcoin’s price.
The Federal Reserve is expected to maintain current interest rates at the conclusion of its two-day meeting later on Wednesday. However, the central bank may adopt a more hawkish stance, particularly in light of persistent inflation and a strong labor market.
Ahead of the Fed’s decision, key consumer price index data due on Wednesday is also anticipated to show inflation remained high in May.
Recent concerns over the labor market and inflation have led traders to reduce expectations of a rate cut in September, strengthening the dollar and putting pressure on cryptocurrency prices.
Altcoins Decline Amid Rate Jitters
In addition to Bitcoin, major altcoins also fell on Wednesday amid ongoing worries about U.S. interest rates.
Ethereum, the second-largest cryptocurrency, dropped over 1% to $3,511.91, further erasing gains made in May due to excitement over a potential spot Ether exchange-traded fund.
Other major altcoins like ADA, XRP, and SOL declined between 1.2% and 2.5%. Meme tokens DOGE and SHIB also fell by 1.5% and 2.4%, respectively.
Sentiment towards meme tokens appeared to be cooling alongside meme stocks, with GameStop Corp (NYSE
) losing most of its gains from late May after a prominent influencer returned to social media following an extended absence.
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