After moving early on Wednesday, bitcoin fell during the US afternoon and fell to session lows below $66,000, putting pressure back on the lower end of its recent range.
Having traded $68,500 overnight, BTC is down 2.5% in the last 24 hours and was last trading at $66,200.
Cryptocurrency stocks, which started the day on a stronger foot, followed suit, paring gains or falling into declines across the board. The most notable was Coinbase (COIN), which turned its 3% gain in the morning into a 2% drop in the afternoon. Strategy (MSTR), the largest corporate holder of bitcoin, was down about 3% as the underlying asset weakened.
After a fast start to the session, US stocks had given up much of their gains shortly before the close of trading. The surprisingly tough minutes from the Federal Reserve’s Federal Open Market Committee (FOMC) meeting in January didn’t help. As expected, a majority at the central bank agreed with the decision to pause rate cuts, but (in a twist) several suggested that the Fed favor “bilateral” guidance under which the bank could choose to raise rates if inflation remains sticky.
The US dollar, which had already risen during the day, strengthened further, and the dollar index (DXY), which measures the dollar against a basket of major foreign currencies, rose to its highest level in almost two weeks. A firmer dollar often weighs on risk assets, and Wednesday’s cryptocurrency fade seemed to fit that pattern.
With today’s decline, bitcoin faces a fifth consecutive week of losses, its worst streak since the long bear market of 2022.
It also faces a key test at current levels. The $66,000 area held as support last week and helped fuel a rebound above $70,000. If that floor gives way decisively, traders will likely start looking at the early February lows at $60,000 or a further leg lower.
