Recent U.S. economic data could prompt more hawkish forward guidance from the Federal Reserve.
-Bitcoin has lost over 16% in April, on track for its worst month since November 2022.
-BTC could drop to the mid-to-low $50,000 region, Ledn CIO said.
-The Hong Kong spot crypto ETF debut wasn't as poor as it was made out to be, a Bloomberg Intelligence ETF analyst noted.
It might be time to call the cryptocurrency correction a bear market, as bitcoin (BTC) tumbled below $60,000 with what appeared to be a poor debut of spot ETFs in Hong Kong and interest rate fears giving traders plenty of reason to sell on Tuesday.
BTC hit a $59,100 low in the afternoon hours, its weakest price since late February and down over 5% over the past 24 hours. The broad-market CoinDesk 20 Index (CD20) declined even more during the same period, falling 6% as ether (ETH), solana (SOL) nursed 7%-8% losses.
Bitcoin now lower by roughly 20% from its all-time high above $73,000 hit in mid-March.
Traditional markets struggled as well after a spate of U.S. economic reports Tuesday morning had a stagflationary feel, showing slowing growth and speedier price pressures. The Nasdaq shed 2% for the day, while the S&P 500 fell 1.6%.
Recent reports showing stronger U.S. economic data and hotter inflation significantly tapered U.S. Federal Reserve interest rate cut expectations and that's weighing on the digital asset market, Joel Kruger, market strategist at LMAX Group, pointed out in a Tuesday report.
"We continue to see evidence of the Fed needing to be leaning back to a higher for longer policy outlook, despite investor calls for more accommodation," Kruger said. "With the U.S. dollar coming back into favor across the board, we are seeing this filter over into crypto assets as well."
Worst month since FTX
With Tuesday's decline, BTC and the broader crypto market are on track to snap their seven-month winning streak with their worst monthly decline since November 2022, when crypto exchange FTX imploded.
With a few hours left from the last day of the month (UTC time), bitcoin is down over 16% through April, and ether is lower by 18%.. Smaller cryptocurrencies suffered an even deeper correction, with altcoin darlings SOL, dogecoin (DOGE), avalanche (AVAX) lower by 35%-40% this month.
