Bitcoin Slips Towards $42K as Interest Rates Soar; Chainlink’s LINK Defies Crypto Slump

Crypto
markets
slumped
on
Monday
as
U.S.
interest
rates
continued
to
soar
on
strong
economic
data
and
Federal
Reserve
Chair
Jerome
Powell
reiterating
his
hawkish
stance
from
last
week.

Bitcoin

(BTC),
the
largest
crypto
by
market
capitalization,
slipped
to
$42,200
late
Monday
from
as
high
as
$43,400
earlier
in
the
day.
At
press
time,
it
was
lower
by
1.2%
over
the
past
24
hours.

Almost
all
cryptocurrencies
endured
similar
or
greater
losses
during
the
day,
highlighted
by
the
broad-market
crypto
index
CoinDesk20’s
{{CD20}}
1.3%
decline,
with
18
assets
in
that
gauge
declining.
Native
token
of
Chainlink

(LINK),
a
software
platform
that
connects
blockchains
with
the
outside
world,
was
the
biggest
gainer
among
CD20
constituents
with
a
modest
2%
advance
during
the
day.

The
slump
in
crypto
prices
happened
as
the
10-year
U.S.
Treasury
bond
yield
jumped
another
14
basis
points
during
the
day,
extending
its
two-session
rise
to
30
basis
points.

Fueling
the
move
was
a
Sunday
night
60
Minutes
appearance
by
U.S.
Federal
Reserve
Chair
Jerome
Powell
at
which
he
confirmed
that
the
Fed
has
little
intention
of
cutting
rates
in
March,
as
markets
had
previously
expected.

And
following

Friday’s
blowout
employment
numbers,
there
was
more
solid
economic
news
on
Monday,
with
the
ISM
Services
index
unexpectedly
rising
to
53.4
in
January
versus
December’s
50.5.

Key
U.S.
stock
indexes,
the
S&P
500
and
the
tech-centric
Nasdaq
100,
both
closed
with
small
declines.

Despite
today’s
loss,
BTC
was
still
holding
up
above
$42,000,
a
significant
support
level
for
prices
with
buyers
stepping
in,
but
risk
appetite
is
currently
low
as
crypto
markets
lack
fresh
investment
narratives,
SwissBlock
analysts
said
in
a
Monday
report.

“Exclusive
drivers
for
the
crypto
market,
such
as
BTC
ETFs,
have
already
played
out,
leaving
players
waiting
for
the
next
significant
signal,”
the
report
noted.

On
the
longer
term,
10x
Research
analyst
and
Matrixport
head
of
research
Markus
Thielen
sees
the
largest
crypto
to

rally
to
$70,000
by
the
end
of
2024,
some
65%
higher
than
current
prices.

“Supported
by
the
macro
environment,
monetary
tailwinds,
the
U.S.
election
cycle,
and
gradually
increasing
demand
from
TradFi
investors
allocating
to
bitcoin
ETFs,
a
bitcoin
rally
to
$70,000
appears
plausible,”
Thielen
wrote
Friday.