Bitcoin experienced a modest 1% increase in the past 24 hours, reaching $67,001.7 by 00:57 ET (04:57 GMT) on Wednesday. Despite this uptick, the cryptocurrency has largely maintained a trading range between $60,000 and $70,000, a pattern that has persisted for over a month subsequent to its peak above $73,000 in early March.
The slight rise in Bitcoin comes in the wake of a decline in the value of the dollar overnight, providing some relief to investors. However, lingering concerns regarding the prospect of sustained higher interest rates, coupled with waning enthusiasm over Exchange-Traded Funds (ETFs), have kept the token firmly within its established range.
Despite a notable rebound in technology stocks this week, a sector with which Bitcoin typically exhibits correlation, the world’s largest cryptocurrency has seen limited gains.
Recent events, including Bitcoin’s halving event which occurred over the weekend, and the introduction of the ‘Runes’ protocol, which drove a surge in on-chain activity and transaction fees to record highs, failed to significantly impact Bitcoin’s price trajectory.
Moreover, data released earlier this week indicated that investment products within the crypto space, particularly Bitcoin exchange-traded funds, witnessed a second consecutive week of capital outflows. This trend coincides with diminishing excitement surrounding the U.S. approval of such ETFs earlier this year, a development that previously propelled Bitcoin to record highs in March.
While the approval of ETFs initially fueled optimism and contributed to Bitcoin’s surge, further upward momentum in the token now appears uncertain.
In the broader cryptocurrency market, price movements remained relatively subdued on Wednesday. Ethereum recorded a 2.4% increase, while XRP and Solana saw gains of 0.3% and 2.2%, respectively.
The cryptocurrency sector has faced pressure in light of persistent concerns regarding the likelihood of sustained higher interest rates in the United States. Expectations for early interest rate cuts by the Federal Reserve, which had bolstered crypto prices throughout the first quarter of 2024, waned considerably in April.
With robust inflation indicators and hawkish signals from the Fed, traders have adjusted their expectations, pricing out the possibility of a rate cut in June.
The prospect of higher interest rates poses challenges for the cryptocurrency market, which traditionally benefits from heightened speculation in a low-rate, high-liquidity environment.
Attention this week remains focused on additional data releases concerning the U.S. economy, which are anticipated to influence perceptions regarding interest rate trends. Notably, Gross Domestic Product (GDP) data for the first quarter is scheduled for release on Thursday, followed by the Personal Consumption Expenditures (PCE) price index data, the Fed’s preferred gauge of inflation, on Friday.
