Bitcoin exhibited a slight uptick on Monday, following a rebound from bear market territory over the weekend, albeit amid lingering uncertainty about further gains amidst heightened speculation surrounding potential U.S. interest rate cuts.
The primary catalyst behind Bitcoin‘s recovery was a notable decline in the value of the U.S. dollar, triggered by disappointing nonfarm payrolls data. This resurgence helped the cryptocurrency bounce back from its recent dip to approximately $59,000, marking a 22% decline from its record high in March.
As of 01:31 ET (05:35 GMT), Bitcoin saw a 1.7% increase in the past 24 hours, reaching $64,247.2.
Bitcoin’s price trajectory also benefitted from growing expectations of a 25 basis point interest rate reduction by the Federal Reserve in September. Cryptocurrencies typically flourish in an environment characterized by low interest rates and ample liquidity, making such a scenario conducive for their growth.
The prospect of a rate cut gains traction amidst indications of a cooling labor market, providing the Federal Reserve with added incentive to pursue monetary easing. However, Friday’s data release follows a streak of robust payrolls readings over the past five months, while inflation, a pivotal consideration for the Fed, continues to exceed the central bank’s annual target of 2%.
Despite Bitcoin’s weekend recovery, its near-term upward momentum was tempered by anticipation surrounding U.S. interest rate developments, particularly ahead of speeches by several Federal Reserve officials in the coming days. Notably, FOMC members Thomas Barkin and John Williams are scheduled to address the public later on Monday, followed by Neel Kashkari on Tuesday.
Nevertheless, Bitcoin remained ensconced within a familiar trading range observed throughout March and April, oscillating between $60,000 and $70,000 amid diminishing enthusiasm surrounding the cryptocurrency market.
Furthermore, capital inflows into Bitcoin investment products, notably spot exchange-traded funds approved earlier this year, witnessed a significant slowdown over the past month. Bitcoin ETFs experienced consecutive weeks of capital outflows, reflecting waning investor interest.
While Bitcoin’s modest gains spilled over into other major cryptocurrencies, including Ethereum, XRP, and Solana, these altcoins also experienced a deceleration in their upward trajectory on Monday.
Bitcoin retained its position as the dominant driver of crypto valuations, accounting for nearly 55% of the overall cryptocurrency market capitalization.
