The bullish momentum that propelled the Bitcoin price to a 2023 high of over $31,500 on July 6 has dissipated as investors’ concerns regarding potential interest rate increases have resurfaced.
The Bitcoin price decline momentarily pushed BTC below $30,000, and traders are concerned that Bitcoin miners sending BTC to exchanges could be an indication of an imminent sell-off. Let’s take a closer look at the current factors influencing Bitcoin’s price.
Bitcoin markets shake-up in the Red
Despite the Federal Reserve pausing rate rises on June 14, Chairman Jerome Powell appears committed to lowering inflation by resuming rate hikes. After Powell’s speech to the Federal Open Markets Committee (FOMC) on June 14, the market appeared confident that the Fed would resume raising interest rates.
The FedWatch tool from CME reveals that the market anticipates such increases at the next FOMC meeting on July 26. As of July 6, the likelihood of future interest rate increases is 92.4%.
To date, crypto prices remain highly correlated with the Dow and S&P 500, and the majority of major banks continue to anticipate a severe U.S. recession in 2023. According to an analysis by U.S. Bank that incorporates over a thousand data points, investor sentiment regarding the present state of the economy remains negative.
SECs crypto crackdown continues to affect crypto markets
In spite of the recent surge of institutional interest in Bitcoin, the actions of U.S. regulators remain undetermined. On July 5, the CEO of BlackRock, Larry Fink, implied that Bitcoin is digital gold and briefly discussed the company’s recent Bitcoin ETF application.
While countries such as Hong Kong and the United Arab Emirates are embracing Bitcoin, on June 5 and 6, the U.S. Securities and Exchange Commission filed civil litigation against the two largest centralized crypto exchanges, Binance and Coinbase. The action has reduced Binance.US’s market share from 22% to less than 1%.
While the SEC has previously stated that Bitcoin is not a security, some market analysts are pondering whether the recent increase in actions represents a renewed attempt to implement Operation Chokepoint 2.0, which aims to restrict access to all digital currencies.
Coinbase may have a pending lawsuit, but BlackRock and Valkyrie, among others, designate Coinbase as their required surveillance partner. The SEC is anticipated to respond to Coinbase’s lawsuit against it on July 13.
BTC retakes $30k in Asian markets
Bitcoin (BTC) rose, and Asian stocks declined on Friday as investors awaited U.S. nonfarm payrolls data following Thursday’s ADP report showing stronger-than-anticipated hiring in the world’s largest economy.
The largest crypto by market cap rose nearly 1.2% to $30,300, reversing a portion of Thursday’s decline. The MSCI’s broadest index of Asia-Pacific equities, excluding Japan, extended the prior session’s weakness to drop to a five-week low, while U.S. equities recorded notable losses after the June ADP private-sector employment report sparked fears of rising interest rates.
In other markets, the price of gold increased to $1,914 per ounce, while the yield on 10-year Treasury notes fell 6 basis points from Thursday’s four-month high to 4.02%. The dollar index, a measure of the greenback’s exchange rate against major fiat currencies, stabilised near 103.00 after overnight losses.
The rest of the crypto market effects
Binance Chief Strategy Officer Patrick Hillmann and Vice-President for Compliance Steven Christie announced their departure from the world’s largest crypto exchange, citing Binance CEO Changpeng Zhao’s response to U.S. investigations. Zhao referred to the departures as company “turnover,” observing that it was a common occurrence in large organisations.
Litecoin experienced the largest loss among the top 10, falling 7.51 percent to $96.28, followed by Dogecoin, which fell 3.65 percent to $0.05527.
According to data from CoinMarketCap, the 24-hour total market cap for cryptocurrencies decreased 2.68 percent to $1.17 trillion, while market volume rose 36.56 percent to $46.15 billion.
Ethereum’s 24-hour NFT sales decreased by 11.7% to US$17.26 million, while sales for the largest Ethereum-native NFT collection, the Bored Ape Yacht Club, decreased by 9.68% to US$2.80 million.
Azuki sales increased 32.96 percent to $1.58 million as the collection began to recover from the criticism levelled against the new Azuki Elementals collection for being too similar to the original.
