Focus was also on the halving event, which appeared imminent, and what its effects would be on the long-term supply of Bitcoin.
Bitcoin fell 3.3% to $61,767.3 in the past 24 hours by 00:46 ET (04:46 GMT).
Focus was now squarely on the halving event, which is set to take place with the generation of block no. 840,000 on the Bitcoin blockchain. Less than 300 blocks were left to reach the block, with the halving set to take place by April 20.
The event will reduce the pace at which new Bitcoin is mined by effectively halving rewards for miners.
The halving furthers the narrative that Bitcoin’s scarcity will help buoy the token’s prices.
But while the token has appreciated sharply over the past 12 years, there appeared to be few direct links between the past three halving events and immediate price gains in Bitcoin.
External factors- such as interest rates and risk appetite- appeared to have played a bigger role in Bitcoin’s price trajectory, especially given its tendency to track U.S. technology stocks.
While a bulk of Bitcoin’s gains this year were driven by the U.S. approval of spot exchange-traded funds, this momentum now appeared to be running low.
The token, along with the broader crypto space- has thrived chiefly in low-interest rate, high-liquidity environments- a scenario that is likely to materialize later, rather than earlier in 2024.
Broader cryptocurrency prices saw sustained losses as traders further dialed back expectations for a June interest rate cut by the Federal Reserve. This came in the wake of strong inflation data and hawkish signals from Fed officials.
Crypto prices took little advantage of a mild pullback in the dollar, as traders locked-in profits at 5-1/2-month highs in the greenback.
No. 2 crypto Ethereum fell 3.3% to $3,009.41, while Solana and XRP lost 5% and 0.1%, respectively.
Gains in the crypto space this year have been biased largely towards Bitcoin, after the approval of the spot ETFs. Bitcoin accounts for over 55% of overall value in the crypto market.
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