Why did bitcoin mining stocks end down on Monday?
- Bitcoin mining stocks declined in line with the bitcoin price today.
- U.S. dollar strength pushed BTC under $30,000 again on Monday.
- DXY climbed today on the back of Empire State Manufacturing data.
Shares of the bitcoin mining companies ended down on Monday as “BTC” – the asset they mine and hold returned to the sub $30,000 level again.
Why did the bitcoin price slip today?
One of the primary reasons behind weakness in the bitcoin price today was the U.S. Dollar Index that moved to the upside. BTC tends to be inversely related to the USD since it was created as a substitute for fiat currencies.
That leaves us to wonder why did the U.S. dollar gain strength on Monday in the first place? The answer lies in Empire State Manufacturing data that confirmed factory activity in New York clawed back in April for the first time since late last year.
A few of the notable bitcoin mining stocks that closed in the red today include Riot Platforms, Bitfarms, and Hut 8 Mining Corp.
Is bitcoin still in a bear market?
Now, let’s look at it in another way. Simply put, the monthly business activity survey suggests the U.S. economy is keeping resilient in the face of the Fed’s aggressive rate hikes.
That creates at least some room for the central bank to lift rates further to tame inflation which was still at 5.0% in March. It’s significant because the world’s largest cryptocurrency performed poorly last year amidst rising interest rates.
Nonetheless, there’s reason to not read too much into the drop in BTC today, including the recent bank failures that could make the Federal Reserve revisit its hawkish stance. According to FxPro analyst Alex Kuptsikevich:
Technically, bitcoin has already proven the end of the bear market by securing above key moving averages and steadily retreating from the bottom.