Bitcoin Price Slightly Falls Amid Dollar Pressure
Bitcoin Faces Pressure from Strong Dollar
The price of Bitcoin fell slightly on Wednesday, mainly due to pressure from a strong dollar as investors became more uncertain about the path of U.S. interest rates ahead of key labor market data this week.
Bitcoin Price Decline
The price of Bitcoin dropped by 0.5% to $66,229.5 by 01:15 ET (05:15 GMT).
Risk Appetite Affects Bitcoin
A broader decline in risk appetite, reflected in a sharp fall in global stock markets, also impacted Bitcoin as investors shifted towards safe havens like the dollar and gold.
Global Market Conditions
The dollar reached a 4-½ month high this week, while gold hit record highs. Risk appetite in Asian markets was further dampened by a powerful earthquake in Taiwan, contributing to negative trading in Asian stocks. The dollar’s decline from recent peaks also influenced market dynamics.
Concerns Over Silk Road Funds Mobilization
Bitcoin investors remained cautious amidst speculation about a potential mass sale event, with reports of the U.S. government mobilizing part of the 30.1K Bitcoins ($2.1 billion) recovered from the Silk Road marketplace. Crypto influencer ZachXBT highlighted on social media the movement of $139 million of Bitcoin to a Coinbase deposit address linked to the U.S. government.
Impact on Bitcoin Prices
The possibility of selling these Bitcoins could potentially exert downward pressure on Bitcoin prices. Previous instances of U.S. government crypto seizures have involved auctioning off seized tokens. The recent price surge of Bitcoin, reaching a record high above $73,000, was largely driven by the U.S. approval of spot exchange-traded funds, but the slowdown in capital inflows into these ETFs may lead to further price weakness.
Market Outlook
The anticipation of prolonged higher U.S. interest rates poses additional challenges for Bitcoin, as the token typically thrives in high-liquidity, high-speculation environments.
