Bitcoin staged a notable recovery on Monday, reclaiming lost ground from the previous week’s downturn, bolstered by sustained capital influx into exchange-traded funds (ETFs) and growing anticipation surrounding the impending “halving” event, which promises to reshape the supply dynamics of the world’s largest cryptocurrency.
At 01:46 ET (05:46 GMT), Bitcoin surged 4.9% to reach $67,462.8, although still trading approximately $6,000 below its recent all-time high attained earlier in March.
The resurgence in Bitcoin’s value finds support in the steady stream of capital pouring into recently-approved spot ETFs, counteracting downward pressure stemming from ongoing outflows from the Grayscale Bitcoin Trust (NYSE:GBTC).
Investor sentiment remains buoyant ahead of the forthcoming “halving” event, slated to occur around April’s 740,000 block milestone, wherein the rate of new Bitcoin issuance will be halved, potentially tightening the cryptocurrency’s supply. However, uncertainty looms regarding the precise timing of this significant event.
Despite the positive momentum, Bitcoin’s ascent faced resistance amid a strengthening US dollar, which surged to a one-month high on Monday. Dovish signals from major global central banks have propelled investors towards the dollar as a high-yield, low-risk currency.
Moreover, market attention remains focused on upcoming signals concerning US interest rates, particularly awaiting key personal consumption expenditures data scheduled for release on Friday, serving as the Federal Reserve’s preferred gauge of inflation. This data is anticipated to offer insights into the Fed’s future monetary policy decisions.
Throughout the week, a series of Fed officials are slated to provide further guidance on the central bank’s stance on interest rate adjustments for the year 2024. Last week’s Federal Reserve meeting indicated the possibility of 75 basis points’ worth of cuts within the year, highlighting the ongoing deliberations within the central bank regarding monetary policy adjustments.
