Bitcoin‘s price dipped slightly on Wednesday as traders sought to secure profits from a recent rally driven by optimism surrounding a potential spot Ether exchange-traded fund (ETF). This pullback comes as the market eagerly awaits more signals on U.S. interest rates.
Ether Holds Steady at Two-Month High Amid ETF Hopes
Ether, the world’s second-largest cryptocurrency, remained steady at a two-month high following reports indicating progress toward the approval of spot ETFs by the Securities and Exchange Commission (SEC). The SEC is expected to announce a crucial decision on the matter later this week.
Despite the positive developments, concerns over persistent U.S. inflation and the possibility of prolonged high interest rates have kept crypto traders cautious, leading to Bitcoin’s recent decline.
As of 01:33 ET (05:33 GMT), Bitcoin had fallen 1.5% over the past 24 hours, trading at $69,880.1.
Ether Climbs as SEC ETF Decision Nears
Ether saw a 3% increase in the past 24 hours, reaching $3,755.37, its highest level since early March. The token had surged by up to 18% on Monday following media reports that the SEC had requested exchanges to refine their filings for spot Ether ETFs. This request is seen as a step towards potential approval, although the SEC has yet to engage with the applicants.
Analysts suggest that the SEC’s actions indicate a higher likelihood of eventual approval for a spot Ether ETF, which is anticipated to trigger a price rally similar to the one experienced following the approval of spot Bitcoin ETFs earlier this year.
Bitcoin Struggles to Maintain Gains Amid Fed Rate Speculations
Bitcoin had peaked at $71,000 on Tuesday before retreating to a range between $60,000 and $70,000, a pattern observed over the past two months. Despite the optimism surrounding a spot Ether ETF, persistent concerns about U.S. interest rates continue to constrain sentiment towards cryptocurrencies.
Several Federal Reserve officials have stated this week that more evidence of declining inflation is needed before the central bank can consider cutting interest rates. Investors are now focused on the minutes from the Fed’s late-April meeting for additional insights into potential rate cuts.
High interest rates tend to dampen the appeal of high-risk and speculative assets like cryptocurrencies.
Altcoin Rally Cools Amid Bitcoin Retreat
Broader altcoin prices also softened as Bitcoin retreated. While traders remained largely focused on Ether within the altcoin space, resilience in the U.S. dollar limited significant gains in the crypto market.
Solana saw a slight decline of 0.2%, while XRP fell by 0.5%. Among meme coins, Dogecoin rose by 3.1%, and SHIB increased by 1%.
