Investing.com-- Bitcoin’s price fell on Tuesday, pulling back from recent gains amid growing bets that U.S. interest rates will fall at a slower pace than initially anticipated.
A risk-off sentiment in broader financial markets, especially stocks, also spilled over into crypto, driving down prices across the board. Anticipation of more signals from the Federal Reserve and key inflation data this week kept traders on edge.
Bitcoin fell 1.4% to $62,609.1 by 01:07 ET (05:07 GMT).
Bitcoin weighed by stronger dollar, bets on smaller rate cut
Strength in the dollar weighed on crypto markets, as the greenback remained in sight of recent seven-week peaks.
The dollar surged after nonfarm payrolls data released last week showed the U.S. labor market remained strong, potentially eliciting a slower pace of rate cuts from the Fed.
Traders were seen pricing in an 81% chance for a 25 basis point cut in November, and a 19% chance for no changes to rates, CME Fedwatch showed. Traders were also seen positioning for a higher terminal rate.
A slower pace of rate cuts means that U.S. rates will stay high for longer, which bodes poorly for speculative assets such as crypto.
Fed minutes, inflation awaited
Focus this week was on more cues on U.S. interest rates. The minutes of the Fed’s September meeting are due on Wednesday.
The central bank had cut rates by 50 bps and marked the beginning of an easing cycle, although it still signaled future rate cuts will be dependent on data.
To that end, consumer price index inflation data is due on Thursday and is likely to factor into the outlook for interest rates.
A slew of Fed officials are also set to speak in the coming days.
Crypto price today: altcoins retreat
Among broader crypto prices, most altcoins fell tracking Bitcoin, while also reversing course from a weekend rebound.
World no.2 crypto Ether fell 2.7% to $2,420, while SOL, XRP and ADA lost between 2% and 4%. MATIC fell 0.2%, while among meme tokens, DOGE lost nearly 5%.
Still, crypto markets marked some gains in recent sessions, especially amid increased bets on a Donald Trump victory in the 2024 presidential elections.
Crypto betting platform Polymarket showed Trump leading Vice President Kamala Harris 53% to 46.2%.
Trump has maintained a pro-crypto stance, while Harris is expected to continue a regulatory crackdown against crypto.