Bitcoin
and other cryptocurrencies dropped Monday, nearing key price levels, amid a wider slump in risk-sensitive assets as a number of macroeconomic catalysts loom for cryptos in the coming days.
The price of
Bitcoin
has fallen 2% over the past 24 hours to below $26,100, nearing the key $26,000 level that marks the bottom of a trading range that has provided support to the largest digital asset for more than a month. Bitcoin has failed to hold recent gains after trading above $27,000 last week.
Trading volumes and volatility remain historically low for cryptos—a sign of waning investor interest in the space long known for its wild price action. While crypto traders continue to look ahead to a decision from the Securities and Exchange Commission on spot Bitcoin exchange-traded funds, it could be months before that catalyst materializes.
Meanwhile, Bitcoin, like the stock market’s
Dow Jones Industrial Average
and
S&P 500,
has been moving on the back of macro catalysts that could shift the needle on the outlook for interest rates, already at a generational high. Higher returns on risk-free cash or government debt give fewer incentives for investors to pile into riskier bets like Bitcoin, so the question of whether the Federal Reserve will raise interest rates in November and when it may lower rates remains key.
That puts economic data in focus, with signs of a strong U.S. economy unlikely to push the Fed to lower rates while indications of weakness could prompt a more accommodative stance from the central bank.
Monday sees Dallas Fed manufacturing activity data for September and the Chicago Fed national activity index for August. Highlights will come later in the week, with Thursday’s revisions to U.S. gross domestic product over the past five years and the Fed’s preferred inflation measure—the personal-consumption expenditures index—due Friday.
Beyond Bitcoin,
Ether
—the second-largest crypto—shed 1.5% to $1,575. Smaller tokens, or altcoins, also were weak, with
Cardano
down 1% and
Polygon
slipping 2%. Memecoins fell, with
Dogecoin
dropping 2% and
Shiba Inu
shedding 1%.
Write to Jack Denton at [email protected]
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