Bitcoin slumps further as China tightens crypto crackdown
Bitcoin tumbled on Monday to a two-week low on China’s expanding crackdown on bitcoin mining, as investors grew more uncertain about the future of the leading cryptocurrency.
Bitcoin fell as low as $31,333, a two-week trough, dragging down other cryptocurrencies. It was last down 10.7%, its largest daily percentage loss in a month.
The world's biggest cryptocurrency has lost more than 20% in the last six days alone and was at half its April peak of almost $65,000. Year to date, it remained up about 11%.
Some bitcoin investors were concerned further losses could be in store due to a chart formation known as a death cross which occurs when a short-term average trendline crosses below a long-term average trendline.
China has been tightening its crackdown on cryptocurrencies. On Friday, authorities in the southwest province of Sichuan ordered bitcoin mining projects to close.
Dollar dips after Fed rally
The dollar had weakened on expectations that the Fed will hold rates near zero for years to come even as the economy rebounds from COVID-19 pandemic-related shutdowns.
Two regional Federal Reserve officials said on Monday that a faster withdrawal from the central bank’s bond purchase program could give it more leeway in deciding when to raise interest rates.
New York Fed President John Williams also said that more progress is needed before the Fed should begin to scale back some of its economic support.
Comments by Fed Chair Jerome Powell will be in focus on Tuesday to see if he confirms the hawkish outlook or tries to row back market expectations of faster tightening.
The dollar index against a basket of currencies fell 0.44% on the day to 91.849. The euro gained 0.41% to $1.1917 and the greenback gained 0.03% to 110.29 Japanese yen.
The British pound gained 1.03% to $1.3933.
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