Bitcoin BTC price dips below $26,000 as investors watch CPI data and FOMC rate hike decision

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After briefly surfacing above $26,000 early Monday morning, bitcoin has returned to its recent and more familiar haunts below that threshold.

The largest cryptocurrency by market capitalization was recently trading at $25,850, down one percentage point in the past 24 hours. BTC fell as low as $26,000 late last week following a troubling mix of U.S. Securities and Exchange Commission (SEC) lawsuits against crypto exchange giants Binance and Coinbase, and ongoing angst over the US central bank’s inflation-fighting monetary policy. Investors will now be watching for May’s Consumer Price Index (CPI) release on Tuesday and the Federal Reserve’s interest rate decision a day later.

The Cryptoverse is stuck in limbo as regulatory fears run wild and some investors abandon key exchanges, Edward Moya, senior market analyst at forex market maker Oanda, wrote in an email. Mainstream crypto acceptance will not happen with DeFi. As experienced crypto traders shift more of their trading volumes to DeFi, this is not good news for long-term growth and attracting new investors.

Moya noted that ahead of the CPI report and Fed decision, bitcoin is enjoying key support in the $25,400 region.

Ether recently changed hands at around $1,735, down 1.8% from Sunday, as it was also swept away by a larger market downturn that saw major tokens mentioned in SEC lawsuits . SOL, the Solana blockchain token, recently plunged almost 7%, while MATIC and ADA, the cryptos native to smart contract platforms Polygon and Cardana fell around 2.8% and 1.5%, respectively. Meanwhile, the CoinDesk Ethereum trend indicator entered downtrend territory a week after rising into the significant recovery category, with the drop a sign of weakening investor sentiment.

Crypto’s trajectory has once again deviated from major US stock indices, which have risen on the back of a recent surge in big tech stocks. The S&P 500 climbed 0.9% to its highest level in a year, and the tech-heavy Nasdaq jumped 1.5%, while the Dow Jones Industrial Average added 0.5%. The 10-year Treasury yield climbed to 3.73%. Gold, which has often traded similarly to digital assets, fell 0.2%.

In a Telegram message to CoinDesk, Strahinja Savic, head of data and analytics at Toronto-based crypto platform FRNT Financial, noted that coins caught in last week’s SEC actions are under-reported. efficient. Optimistically, however, he recalled that in 2020 Ripple’s XRP token lost a lot of ground before rallying strongly months later.

“(The) market capitalization of XRP is now roughly where it was just before the SEC sued Ripple,” Savic wrote. “We’ll see if the assets named in the SEC lawsuits show similar resilience amid the regulatory complexity arising from these cases (Binance, Coinbase).”

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