Bitcoin near $57,000 amid fears of high U.S. interest rates

A price decline of 20% from a recent high indicates that an asset is in bear market territory, which was now the case for Bitcoin

Bitcoin price dropped on Thursday, remaining pinned below key support levels as fears of high U.S. interest rates remained in play after a Fed meeting, with the token now entering a bear market from its March record highs.

Bitcoin dropped 4.6% in the last 24 hours to $57,492.3 by 05:13 GMT. The token slid below the coveted $60,000 support this week, and was now down around 22% from its record high of $73,740, which it reached in early-March.

A price decline of 20% from a recent high indicates that an asset is in bear market territory, which was now the case for Bitcoin.

The world’s biggest crypto currency struggled to make any price headway after reaching a record high in March, and had largely moved within a $60k to $70k trading range for more than a month.

But Bitcoin broke below the trading range this week amid a storm of negative factors, with the biggest weight being growing conviction that U.S. interest rates will remain high for longer. This notion saw the token take little advantage of an overnight decline in the dollar, as the Fed said it had no plans to raise interest rates further.

But the central bank also flagged little intent to begin cutting rates, particularly in the face of sticky inflation.

Higher-for-longer rates bode poorly for assets like Bitcoin, which usually thrive in a low-rate, high-liquidity environment that favours speculative trading.

Fears of high rates also sapped enthusiasm over spot ETFs. Bitcoin investment products faced a series of major outflows for three consecutive weeks.

The launch of spot exchange traded funds in Hong Kong also provided little cheer to crypto markets, as the products saw limited inflows in their debut sessions.