Investing.com– The price of bitcoin fell on Monday, once again testing key support levels, as sentiment towards cryptocurrencies showed few signs of improving ahead of US inflation data. which are likely to influence interest rates.
They stabilized from last week's losses, putting further pressure on cryptocurrency markets as traders remained largely biased towards the dollar ahead of inflation readings.
fell 0.4% in the last 24 hours to $60,910.5 at 00:45 CET (04:45 GMT). The world's largest cryptocurrency was on the verge of falling below the $60,000 support level, which could portend deeper price losses.
The token sank more than 3% in the past seven days as fears of more US regulatory action against the cryptocurrency market further soured sentiment. This was exacerbated by signs of sustained capital outflows from crypto investment products, primarily Bitcoin exchange-traded funds.
Bitcoin fragile, dollar strong as US inflation test nears
The dollar stabilized on Monday, putting pressure on Bitcoin and cryptocurrency prices as attention turned squarely to upcoming readings on US inflation.
The data will be released on Tuesday, while the most watched reading will be released on Wednesday.
Any sign of persistent inflation is likely to further dampen expectations of early interest rate cuts by the Federal Reserve, a scenario that does not bode well for crypto markets.
Cryptocurrencies tend to thrive in a low-rate, high-liquidity environment, and the prospect of higher US rates for longer presents the opposite of such a scenario.
More comments from Fed officials are also expected this week, after a number of officials questioned expectations for early rate cuts.
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Cryptocurrency prices received little support from comments from presidential candidate Donald Trump, who expressed support for the industry and accused the Biden administration of trying to kill the industry. Trump also said that his campaign would accept crypto donations.
Crypto Price Today: Altcoins Pull Back Amid Some Positive Signs
Broader cryptocurrency prices also retreated on Monday, extending last week's losses amid little relief for markets.
The world's No. 2 cryptocurrency fell 1.5% to $2,884.43, while it fell 5.8% and 3.2%, respectively.
Memecoins also posted losses, falling 5.1%.
