Bitcoin (BTC) Price Plunges 6% to Hit 5-Month Lows

Cryptocurrencies, led by Bitcoin (BTC), dropped sharply overnight as high-risk assets continue to struggle in the current market environment.

Bitcoin price lost around 7% to hit low $38,000s, which are the lowest levels seen since August. Ethereum (ETH) price plunged almost 8% in the last 24 hours to hit $2,809.51.

The drop comes on the heels of another difficult session for Wall Street on Thursday after major indexes erased earlier gains to close in the red.

The 10-year U.S. Treasury yield rose in recent days to hit 1.89%, prompting investors to allocate their capital into riskier assets. Furthermore, the Federal Reserve is expected to start reducing its balance sheet as the market prices in four rate hikes this year.

In the past, investors have been turning to Bitcoin which served as a hedge against increased inflation, however, analysts warned that a more aggressive Federal Reserve stance could affect Bitcoin and digital assets.

Since hitting its all-time high of around $69,000 in November, the world’s largest cryptocurrency has plummeted 40% to date.

Market analyst Edward Moya noted it was “a little disappointing to not see bitcoin react more positively to the reversal in Treasury yields.”

The 10-year yield pulled back to hit a low of 1.769% overnight, but obviously not enough to stop Bitcoin from correcting lower as well.

By Senad Karaahmetovic | [email protected]

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