Bitcoin came under pressure on Thursday, losing momentum this week just days after the world’s biggest digital asset breached $25,000 for the first time in two months.
Bitcoin crosses $25,000
Bitcoin (BTC) fell 0.5% to $23,547 in the last 24 hours. BTCUSD briefly breached the $25,000 threshold over the weekend, trading above that threshold on Sunday for the first time since mid-June last year.
The cryptocurrency got a boost from slowing inflation in the US. Traders felt this relieved the Federal Reserve, which raised interest rates to curb rising prices.
But minutes from the Fed’s latest meeting, released on Wednesday, indicated that central bankers still see the need to keep raising interest rates to tame inflation. Stocks fell on Wednesday as investors feared the Fed could be too aggressive in raising rates, leading to slower economic growth in the United States.
Bitcoin and its peers should, in theory, trade independently of traditional finance, but have been found to be highly correlated with other risk-sensitive assets like stocks.
Craig Erlam, senior market analyst at Oanda, noted that bitcoin’s trend over the past two months still looks positive. But he said the rally that took bitcoin down to $25,000 “has lost significant momentum and that could start to weigh more heavily on the price.”
He added that a move below $22,500 “could suggest that the rally has run its course for now.”
Ether, the second largest cryptocurrency, rose slightly to $1,874 in the last 24 hours. The token backing the Ethereum blockchain network, however, has lost the momentum it gained last week after passing the final test before a major upgrade.
