The price of bitcoin has slumped with a 12-day low on Tuesday, which was extending up to a double-digit fall on Monday from the high record.
The biggest cryptocurrency as per the market value has reached up to a low at $45047. This is the lowest level since 11th February. It has dropped from a high record of $58332 towards below $48000 on Monday as per reports.
Bitcoin seemed to be overbought at the record high, and because of the correction, the cryptocurrency is appealing for an inflation hedge. It was diluted with a recent rise of inflation, which was adjusted with the U.S. treasury yield.
The picture can bring a return for the bullish pressure since the analysts are expecting the Federal Reserve Chair, Jerome Powell, to tell Congress later that the Central bank is committed to keeping the interest to a low rate.
The U.S. Central Bank is very likely going to continue with the boost of liquidity for the purchasing program. Also, the recent rise in inflation is having an expectation with improved growth in the outlook. It is very likely going to push the bond for yielding low and put a floor for both the bitcoin and equities.
“The recent spike in yields suppressed some of the risk-on sentiment, which is inevitable so, but I suspect Powell will err to the side of caution, and yields will be lower after his semiannual testimony,” told Denis Vinokourov, the head of research at the London-based prime brokerage Bequant. “In turn, [we’re] expecting risk flows to resume and support upside in BTC and with it the rest of the market.”
The stock markets are coming under pressure on Monday as the 10-year-old bond of the U.S. is reaching a 10-month high of 1.39% while extending to a year-to-year gain for more than 35 basis points.
Now one can expect the Fed to raise the rate more than earlier. Powell made it clear that the central bank is going to hold the interest rate low for some time even after the inflation has risen beyond the 2% target.
This inflation boosting is unlikely going to be scaled back any time with the long term of the bullish case, which is remaining intact. Bitcoin is trading near $48700 with a 10.3% drop for the day.