The price of bitcoin fell to a three-month low Monday morning, continuing a slide that began when the Federal Reserve sparked a broad sell-off last week by cautioning it may move more quickly than previously expected to reverse policy meant to bolster the economy during the pandemic
Experts forecast the latest crypto drawback could persist for weeks if the central bank’s hawkish stance becomes more aggressive.
Bitcoin fell as much as 5% to $39,692 by 9:45 a.m. ET, according to crypto data website CoinGecko, bringing its losses to more than 12% since the Fed warned on Wednesday it may move more aggressively to remove pandemic-era stimulus as it looks to combat high levels of inflation.
In a weekend email, analyst Yuya Hasegawa of cryptocurrency broker Bitbank cautioned he expects the world’s largest cryptocurrency could continue falling until the broader market, which has similarly struggled since the Fed’s Wednesday announcement, digests the likelihood of the Fed hiking interest rates as soon as March.
Though Hasegawa said bitcoin could fall as low as $40,000 in the near term, the analyst cautioned the government’s consumer price index report due out Wednesday could intensify the price weakness if it shows inflation spiked more than expected, further justifying the Fed’s decision to ease stimulus and raise rates.
In a Monday note, Marcus Sotiriou, an analyst at UK-based digital asset broker GlobalBlock, said he expects bitcoin will hover around $40,000 even if the CPI report on Wednesday shows inflation rose more quickly than expected last month, positing the recent sell-off has likely priced in much of the negative expectations.
On Thursday, crypto billionaire Mike Novogratz, the CEO of financial services firm Galaxy Digital, told CNBC the selloff could push bitcoin down another 8% from current prices to as low as $38,000—a level unseen since early August.
Bitcoin was far from alone in falling Monday morning. Over the past 24 hours, ether, binance coin and sol were down as much as 5%—pushing losses to roughly 20% apiece over the last week.
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