Bitcoin faced continued downward pressure on Monday, extending losses amid growing concerns over U.S. interest rates and upcoming inflation data that favored the dollar.
The broader cryptocurrency market also felt the impact of a robust greenback, which reached near a two-month high following strong U.S. purchasing managers index figures.
In the past 24 hours, Bitcoin dropped 2.4% to $62,850.7 by 00:59 ET (04:59 GMT).
Investor sentiment towards Bitcoin remained cautious throughout the week as uncertainties lingered over potential Federal Reserve interest rate adjustments. The outlook is unlikely to improve in the near term, particularly with the release of the key Personal Consumption Expenditures (PCE) price index data scheduled for this Friday.
The PCE index is a crucial inflation metric for the Fed and is expected to influence the central bank’s stance on interest rates in the months ahead. Although Friday’s report may show a slight moderation in inflation, it is anticipated to remain significantly above the Fed’s 2% annual target, providing the central bank with room to maintain higher interest rates.
Elevated interest rates generally dampen the appeal of speculative assets like cryptocurrencies, further impacting Bitcoin’s performance.
Altcoins See Deeper Losses as Bitcoin Falters
While Bitcoin faced moderate declines, major alternative cryptocurrencies suffered more substantial setbacks. Factors contributing to the downturn included token unlocks, reduced institutional demand, and profit-taking activities.
Recent capital flow data indicated that institutional interest, particularly in Bitcoin-related investment products, remained relatively strong. However, Bitcoin itself experienced considerable outflows earlier in June.
Ether, the second-largest cryptocurrency by market capitalization, declined by 4.2% to $3,366.81, marking a one-month low after consolidating gains driven by anticipation over a spot Ether exchange-traded fund.
Other major altcoins followed suit: XRP dropped 3.3%, while ADA and SOL slid 4.3% and 7.4%, respectively, despite recent gains in previous sessions.
Among meme tokens, DOGE and SHIB experienced declines of 4.7% and 5.8%, underscoring broader market weakness across various cryptocurrency categories.
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