Why Is Bitcoin Falling? Prices Fall as Investors Shun Risks.

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(Photo by Dan Kitwood/Getty Images)

Bitcoin tumbled to just above $39,000, hitting one-month lows, and ether dropped below $3,000 on Monday as risk-sensitive assets such as cryptocurrencies remained under pressure from global central banks’ moves to tighten monetary policy.

Bitcoin, the world’s largest cryptocurrency, fell 2.5% to $39,368 over the past 24 hours, according to CoinDesk. It has been trading below $39,000. The top digital asset is down 14.9% year to date and remains well off its all-time high of $68,990 reached early last November.

Ether, the token underpinning the Ethereum blockchain, fell 4.6% to $2,927. The second-largest cryptocurrency could be facing more hurdles due to delays in an overhaul of its network.

Bitcoin and other cryptocurrencies have been trading in tandem with risk-sensitive assets, such as tech stocks, amid the Federal Reserve’s shift to tighter monetary policy. The central bank is expected to boost interest rates many times this year and next in an effort to cool inflation.

Other cryptocurrencies also declined Monday. Solana was down 5.6% and memcoin dogecoin fell 5.1%.

Analysts told CoinDesk that tax-related selling also was pushing crypto prices lower. Monday, April 18, is the deadline this year for US citizens to file their taxes.

Yuya Hasegawa, an analyst at crypto exchange Bitbank, said “demands for inflation hedge are still high as demonstrated by higher gold prices and yields on US treasury bonds.”

Hasegawa said bitcoin could struggle this week “but the upper trend line running through the January and February lows will likely work as a support for the price.”

Write to Joe Woelfel at [email protected]

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