Bitcoin‘s price exhibited little movement during Asian trade on Monday, following a weekend rebound. However, prospects for further strengthening in the cryptocurrency became uncertain as robust U.S. payrolls data prompted traders to reconsider the likelihood of early interest rate cuts.
At 00:58 ET (04:58 GMT), the world’s largest cryptocurrency remained unchanged over the past 24 hours, hovering around $69,406. Despite recovering a substantial portion of its weekly losses over the weekend, Bitcoin continued to operate within a trading range established over the previous month, grappling with directional clarity after reaching record highs in March.
The broader cryptocurrency market mirrored Bitcoin’s subdued movement, with other top cryptocurrencies experiencing rangebound trading. Ethereum, the second-largest cryptocurrency, saw a modest 1% increase, while XRP dipped by 0.4%. Both tokens, like Bitcoin, are under ongoing government scrutiny.
In the realm of traditional finance, market sentiment shifted as expectations for an early interest rate cut by the Federal Reserve diminished. Traders scaled back bets on a rate cut as early as June, with the CME Fedwatch tool indicating just a 51% likelihood of a 25 basis point cut in June.
Anticipation surrounding the release of key consumer price index (CPI) inflation data for March, scheduled for Wednesday, also contributed to muted sentiment. While projections suggest a slight decrease in inflation, it is expected to remain above the Fed’s 2% annual target.
The prospect of higher interest rates for a prolonged period poses challenges for crypto markets, which typically thrive in environments of loose monetary policies that encourage speculative trading.
Recent strength in the crypto market has been primarily driven by Bitcoin, buoyed by a surge in capital flows following the approval of spot exchange-traded funds by the Securities and Exchange Commission (SEC) for U.S. markets in January. However, this influx of capital has shown signs of deceleration in recent weeks, as the initial enthusiasm surrounding the Bitcoin ETF approval wanes.
Traders are now closely monitoring the SEC‘s forthcoming decision on spot Ethereum ETFs, expected in May, as well as ongoing SEC cases involving Ripple and Coinbase Global Inc (NASDAQ: COIN), for further insights into the direction of the crypto market.
