Bitcoin is moving negatively due to US bond yields

The prices of the digital currency “Bitcoin” fell during trading on Monday, to continue its losses for the second day in a row, so that the largest cryptocurrency in the world continued to move negatively, near its lowest level in three weeks, due to risk aversion in light of the rise in US Treasury bond yields.

As positive economic data in the United States, and tough comments from Federal Reserve officials, increased bets on the continuation of the largest central bank in the world in raising interest rates for as long as possible during this year.

Bitcoin price today

On the “Bitstamp” stock exchange, the digital currency “Bitcoin” decreased by $314, equivalent to 1.5%, to $21,476, and the opening price of today’s trading was at $21,790, and it recorded the highest level at $21,897.

When settling prices on Sunday on the Bitstamp exchange, bitcoin prices lost 0.5%, resuming their losses, which were halted the previous day, as part of recovery operations from the lowest level in three weeks at $21,454.

In terms of the entire trading of the past week, bitcoin prices lost 5.0%, in the second consecutive weekly loss, due to the rise of the currency and the yields of US bonds.

On Monday, the market value of digital currencies fell by about $20 billion to a total of $995 billion, which is the lowest level since last January 20, in light of the downward wave that currently controls the prices of Bitcoin, Ethereum, and other major currencies.

The return on the bonds

The US Treasury yield rose for ten years on Monday, by 0.3%, to extend its gains for the third session in a row, recording the highest level in six weeks at 3.755%, which undermines the appetite for risk in the markets.

Strong data on consumer confidence in the United States, and more hawkish comments from Federal Reserve officials, have increased bets that the US central bank will continue to raise interest rates for as long as possible this year.

Bets also increased that interest rates would reach a neutral rate of 6.0%, which means exceeding the US Central Bank’s target of 5.25%, which means increases of about 125 basis points from the current level of US interest rates at 4.75%.

New crisis

In the latest crisis facing the cryptocurrency sector, the company “Paxos Trust”, which issues an encrypted symbol bearing the trademark of Binance, is subject to investigations in the United States of America.

According to the reports received so far, the New York State Financial Services Authority recently opened an investigation with Paxos, and it is not yet clear exactly what the investigation is about.

A spokesperson for the New York State Financial Services Authority said it could not comment on an ongoing investigation, and added that the department is in constant communication with the entities subject to the regulator to identify weaknesses and risks that threaten consumers and the institutions themselves.

Will bitcoin prices drop below $20,000 soon?

It is not excluded that the prices of the largest cryptocurrency in the world will fall below the psychological barrier at $ 20,000, if US inflation data recorded an unexpected rise tomorrow, Tuesday, which will support the rise in US Treasury yields, and lead to the continued reluctance of investors from high-risk markets.