The price of Bitcoin (BTC) is again declining as a rally earlier in the week stalls.
In early trading on June 19, the price of BTC was at $62,500 U.S., down from the $65,000 U.S. level seen at the start of the week.
Analysts say that Bitcoin and other cryptocurrencies, such as Ethereum (ETH) and Solana (SOL), are turning lower after the U.S. Federal Reserve struck a hawkish tone on interest rates.
On June 17, the U.S. central bank indicated that it expects to raise interest rates in America by at least 25-basis points in this year’s second half.
That news sent both cryptocurrencies and stocks lower. Risk assets such as equities and crypto tend to perform best when interest rates move lower.
Over its past four consecutive meetings, the U.S. Federal Reserve has kept interest rates unchanged and maintained the Fed Funds Rate in a range of 3.50% to 3.75%.
However, the Fed took a hawkish turn at its latest policy meeting, removing language around an easing bias and indicating that rates are likely to move higher this year.
The central bank is facing stubbornly high inflation that is currently at 4.2% in America. The Fed targets inflation at an annualized rate of 2%.
News of higher interest rates is weighing on Bitcoin and other cryptocurrencies, say analysts. At the same time, investor sentiment towards digital assets remains fragile.
Bitcoin, Ethereum, and other crypto have experienced a prolonged downturn since last October.
While some market observers say that Bitcoin likely bottomed earlier in June when it fell just below the key support level of $60,000 U.S., others are more cautious.
Bearish analysts continue to say that there are few near-term catalysts for Bitcoin and other digital assets.
Crypto prices got a boost earlier in the week after the U.S. and Iran agreed to a peace deal and crude oil prices fell below $80 U.S. per barrel.
But that rally is now fading due to the prospect of higher interest rates. BTC hit an all-time high of just over $126,000 U.S. last October.
