Bitcoin's price briefly dipped below $29,000 for the first time in a month on Monday amid headwinds related to expected rate hikes this week at the Federal Reserve and European Central Bank.
The price of the world's largest crypto currency fell 2.9% over the past 24 hours to $29,044 at 12:22 p.m. in New York, according to CoinGecko.
On Wednesday, the Federal Open Market Committee will announce its next rate decision, with analysts expecting a hike of 25 basis points to bring its target range to 5.25-5.50%. On Thursday, the ECB is expected to raise rates by 25 basis points to 4.25%.
Investors will pay close attention to the wording of the Fed's post-rate decision statement. Should hawkish sentiments persist, bitcoin's consolidation around the $29,000 mark might face downward pressure.
"Bitcoin headwinds emerge from the anticipated rate hikes from both the Federal Reserve and the European Central Bank this week," Jeff Feng, co-founder of Sei Labs, told the Block. "These monetary adjustments, though typical counter-inflationary measures, could indirectly challenge bitcoin's attractiveness as an inflation hedge."
However, Feng added the expectations could already be priced in by savvy market participants.
"The recent data showing better-than-expected inflation numbers has the potential to result in a more positive outlook on the market, possibly reinvigorating bullish sentiment in both the crypto and tech stock sectors, despite the rate hikes," he said.
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