Bitcoin’s failure to stay above $30,000 has seen it slump through $28,000 today.
BTCUSD – Daily Chart
The price of Bitcoin fell to lows around $27,670 today, and there is still room for a drop toward $25,000.
One of the factors in Bitcoin’s decline was continued upward pressure in global interest rates, with the U.S. 30-year Treasury bond rising to 4.42%, which is the highest level since 2011, according to Bloomberg. The rise in rates is hurting risk assets, and crypto is lower across the board.
“Higher bond yields signal a weaker investment case for equities,” said analyst Noelle Acheson in a market report. “Tighter credit leads to lower growth, higher discount rates bring down cash flow valuations, and the equity risk premium has plummeted to 2007 levels.”
“Higher bond yields also suggest a weaker investment case for non-yielding assets such as BTC and gold,” she added. “However strong the hard asset case may be, yield is yield, and BTC and gold don’t have any.”
There is some hope of an imminent SEC approval for a spot bitcoin ETF, but there is no guarantee of a decision this year. Investors also seek a favourable court ruling for digital asset manager Grayscale, which manages the Grayscale Bitcoin Trust (GBTC). The company launched a lawsuit against the SEC as it seeks to convert the trust into an ETF.
There had been some hope of a ruling on Tuesday, but it did not materialise, and some expect it to come on Friday. Overall volume has been slipping on Bitcoin, giving further room for volatility in the coming trading sessions.
The weakness in stocks is not helping cryptocurrencies, and there is a possibility of a BTC slip to the $25k level.
