Bitcoin saw a heavy loss of more than 5.5% on Tuesday, which may lead to further sales.
BTCUSD – Hourly Chart
The price of BTC has stumbled at $72,000 and fallen to nearly $65,000.
Bitcoin faced heavy selling pressure during Asian trading after some upbeat US factory data helped the dollar index to its highest level since mid-November.
The world’s leading cryptocurrency fell to almost $65,000 in a bearish break lower from a recent week-long consolidation. The broader crypto market also took a hit, with Ethereum, Solana, and Dogecoin among the worst affected.
The dollar index was above the 105 mark for the first time in over four months, taking the four-week advance to more than 2.5% as US economic strength continues to cast doubt on the potential for interest rate cuts. This week, the Institute for Supply Management’s manufacturing data showed that factory activity expanded in March for the first growth since September 2022.
Following the manufacturing report, the pace of Fed rate cuts priced into swap contracts for this year has declined to less than 65 basis points. This shift in market expectations suggests that the market anticipates the Fed to reverse its forecast of three 25-basis point cuts for 2024, with the probability of the US central bank’s first rate cut in June dropping below 50%.
“Markets are focused on the ISM report, though, with 10Y Treasury yields up 10bp on the back of the return of manufacturing growth and higher inflation readings from the sector. There are 20 or so individual Federal Reserve speeches this week, and the market is likely thinking that today’s outcome will make officials wary of committing to significant policy easing,” an ING client note said.
