Bitcoin declined in early Asia trading on July 28 as investors fretted about the prospect of higher interest rates.The largest cryptocurrency fell as much as 2.3 per cent to US$63,414 (S$81,937) by 9am in Singapore, its lowest level in 11 days. Second-largest token Ether was down 3.6 per cent.Citadel Securities expects the US Federal Reserve to raise rates by a quarter percentage point on July 29, a surprise move that it said would strengthen Chairman Kevin Warsh’s credibility in the battle with inflation.Traders see a roughly one-in-three chance of a rate hike. Rising borrowing costs tend to drive investors away from risk assets such as cryptocurrencies.“Bitcoin is mainly getting hit by the rising probability of a Fed hike, as well as macro concerns about AI-related credit risks,” said Caroline Mauron, co-founder Orbit Markets. “The next level to watch on the downside is US$62,000, with strong support expected around US$60,000.”Bitcoin has been making modest gains throughout July amid hopes it has found a floor after crashing around 50 per cent from a record US$126,000 in October.But heavy outflows from US-listed Bitcoin exchange-traded funds late last week underscore the fragility of its recent recovery. The ETFs saw more than US$465 million of outflows on July 23 and July 24, snapping a seven-session inflow streak.Rate-hike concerns are overshadowing recent momentum behind the Clarity Act, a long-awaited US cryptocurrency market-structure bill.“We are currently holding a neutral bias on Bitcoin,” said Tony Sycamore, an analyst at IG Australia. “A sustained break and close above the 200-day moving average (currently at $72,001) is still needed to negate medium-term downside risks, bring a buzz back to Bitcoin and to allow a more constructive technical picture to emerge.” BLOOMBERG