April 2nd, 2024 –
Bitcoin experienced a second consecutive day of declines at the beginning of the new month and quarter, influenced by an increase in Treasury yields and a stronger U.S. dollar.
On Tuesday, the leading cryptocurrency saw a decrease of over 6%, dropping to $65,150.00, which resulted in a total loss of roughly 7% over two days, as per Coin Metrics data. Just on Monday morning, Bitcoin’s value hovered around $70,000, but it fell following reports of the first growth in the manufacturing sector since September 2022 and diminishing speculation on rate reductions in June. Bitcoin now stands approximately 11% below its peak on March 14.
Ether also faced downturns, dropping 4.5% to a trading price of $3,319.08.
In the meantime, the yield on the 10-year U.S. Treasury note reached its highest point of the year, and the U.S. dollar, which typically moves inversely to Bitcoin, hit its strongest in nearly five months.
Bitcoin’s recent dip at the onset of April has been partly attributed to renewed U.S. economic strength and persistent inflation concerns, leading to a shift in Federal Reserve rate expectations and heightened demand for the U.S. dollar due to more favorable yield differentials, according to Joel Kruger, a market strategist at LMAX Group.
The downturn was possibly intensified by a significant Bitcoin owner, or “whale,” who moved over 4,000 Bitcoin to the Bitfinex exchange late on Monday, as evidenced by a surge in the exchange’s reserves reported by CryptoQuant. This increase often indicates a rise in selling pressure and aligns with the sharp decrease in Bitcoin’s price late Monday night.
Furthermore, stocks linked to Bitcoin’s performance also saw declines. Coinbase, a cryptocurrency exchange, dropped by 4%, and MicroStrategy, a software provider that acts as a de facto Bitcoin investment, decreased nearly 7%. Major mining companies such as Marathon Digital and Riot Platforms saw their stock values fall by 7% and 6%, respectively, while CleanSpark, one of the year’s top-performing miners, also experienced a 6% reduction.