Investing.com – Bitcoin fell on Tuesday, retreating from recent gains on growing bets that U.S. interest rates will fall at a slower pace than initially expected.

The risk-free sentiment in broader financial markets, especially stocks, has spilled over to cryptocurrencies, causing prices to decline overall. The wait for more signals from the Federal Reserve and key inflation data this week kept investors on edge.

fell 1.4% to $62,609.1 by 01:07 ET (05:07 GMT).

Bitcoin, weighted by a stronger dollar, bets on a smaller rate cut

Strength in weighted cryptocurrency markets as the dollar stayed within range of recent seven-week highs.

The dollar strengthened after data released last week showed the U.S. labor market remains forceful, which could prompt a slower pace of Fed rate cuts.

Traders estimated an 81% chance of a 25 basis point rate cut in November and a 19% chance of no change in interest rates. Traders were also seen positioning themselves to get a higher final rate.

A slower pace of rate cuts means U.S. rates will remain high for longer, which bodes poorly for speculative assets like cryptocurrencies.

Fed minutes, waiting for inflation

The focus this week has been on more U.S. interest rate signals. The September Fed meeting will be held on Wednesday.

The central bank cut interest rates by 50 basis points and initiated a rate easing cycle, although it continued to signal that future rate cuts would be data-driven.

To this end, inflation data will be released on Thursday and will likely be included in the interest rate outlook.

Many Fed representatives will also make appearances in the coming days.

Cryptocurrency price today: altcoins retreat

Among broader cryptocurrency prices, most altcoins fell, tracking Bitcoin while reversing course after a weekend rebound.

The world’s No. 2 cryptocurrency fell 2.7% to $2,420, while , lost 2% to 4%. dropped by 0.2%, while among meme tokens it lost almost 5%.

Still, cryptocurrency markets have seen some gains in recent sessions, especially amid increased bets on Donald Trump winning the 2024 presidential election.

Betting platform Crypto Polymarket showed Trump leading Vice President Kamala Harris by 53% to 46.2%.

Trump has maintained a pro-crypto stance, while Harris is expected to continue regulatory actions against cryptocurrencies.