Bitcoin’s price has dropped below $63,000 as risk appetite weakens in the market. Ethereum is also struggling to reclaim $2,440. The crypto market has been trading sideways since the beginning of the week due to uncertainty over economic and political factors in the US and geopolitics in the Middle East.
One factor affecting the market is the potential selling pressure from the US government, which has been given permission to sell around 70,000 Bitcoin. The Supreme Court has allowed the US Marshals Service to proceed with the sale of 69,370 Bitcoins seized from the Silk Road online store. This could be the largest sale of its kind in history, but the impact on prices is uncertain.
The recent surprise labor market numbers and Jerome Powell’s hawkish speech have also impacted market sentiment. Hopes for rapid interest rate cuts this year have diminished, leading to a weakening appetite for risky assets, including cryptocurrencies. The Fed Fund futures market now predicts an 87% probability of a quarter-percentage point rate cut at the next meeting, with a 13% chance of rates remaining unchanged.
The upcoming US presidential elections and the potential structural shift in the crypto industry are also causing caution in the markets. In the Middle East, there is anticipation of an escalation in the region, particularly regarding the Israeli response to an attack from Iran.
The scenario of targeting energy facilities could bring inflation to the forefront, requiring central banks to keep interest rates high. Overall, the uncertainty in the market is likely to continue in the coming weeks as various economic and geopolitical factors play out. Investors will need to closely monitor developments to make informed decisions in this volatile environment.
