Bitcoin Slides to $73,000 Range as U.S. Inflation Fuels Fed Rate-Hike Fears
The index measuring investor sentiment in the cryptocurrency market has plunged from “neutral” to “fear” in just one month. As of 8 a.m. on Nov. 11, CoinMarketCap's CMC Crypto Fear & Greed Index stood at 26, down 31 points from 57 last month. The index had also fallen from 29 the previous day and 35
Bitcoin prices have fallen to the $73,000 range amid growing fears of future Federal Reserve rate hikes driven by persistent U.S. inflation. The CoinMarketCap Fear & Greed Index dropped from 57 to 26 in a month, reflecting a sharp decline in market sentiment. Bitcoin traded at $73,637, a 2.05% decline from the previous day, while its price on the Bithumb exchange hovered around 100 million won.
Over the past week, Bitcoin's value dropped 5.39%. Ethereum also saw a 4.1% decline to $2,046, while other major altcoins experienced broad declines. The main driver of this sell-off was the October Consumer Price Index, which rose 0.4% month-over-month, surpassing market expectations of 0.3%. Core CPI, which excludes food and energy prices, increased 0.3%, also above expectations.
These inflation figures raised concerns that the Fed may raise interest rates again in December. Fed officials, including Governor Christopher Waller and Dallas Fed President Lorie Logan, have hinted at additional rate hikes. The ongoing rate hikes, combined with hawkish remarks from Fed officials, have fueled market anxiety. Institutional investors, who previously supported the market, are now reducing their exposure, with U.S. spot Bitcoin ETFs recording net outflows of $201.08 million.
The bond market is also making it less attractive to invest in cryptocurrencies, with the U.S. 10-year Treasury yield nearing 5%. If Treasury yields break above this level, some analysts warn that Bitcoin could fall further below $73,000.
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