On Wednesday, Bitcoin prices continued to decline, extending the downward trend from the previous trading day. The price decreased by 0.8% over the past 24 hours, dropping to $67,372.3 (Beijing time 05:34), due to investor anticipations about the Federal Reserve meeting and key inflation data, which limited risk appetite. On Tuesday, Bitcoin once fell to $66,000.
Recently, Bitcoin prices have been highly volatile due to uncertainties about U.S. interest rates, once surging to $72,000. High interest rates diminish the appeal of high-risk assets like cryptocurrencies, and the low liquidity levels further exacerbate the industry's outlook.
This week, traders have been pulling out of Bitcoin and other cryptocurrencies, opting instead for assets that can better withstand interest rate fluctuations, such as the U.S. dollar. Although data shows that Bitcoin and other cryptocurrency investment products saw an inflow of $2 billion in the first week of June, this has not been reflected in the prices.
The Federal Reserve is expected to keep interest rates unchanged at the end of its two-day meeting on Wednesday. However, facing persistent inflation and a robust labor market, the central bank might present a more hawkish outlook.
Before the Federal Reserve makes its decision, key consumer price index data will be released on Wednesday, with expectations that May's inflation will remain stubborn. Recent concerns about the labor market and inflation have led traders to lower their expectations for a rate cut in September, which has pushed the dollar higher and suppressed cryptocurrency prices.
