Bitcoin
and other cryptocurrencies advanced on Monday as traders aimed to push digital assets out of a range where they’ve been parked for the past month.
And the days ahead hold a key macroeconomic catalyst that could shift the needle as well.
The price of Bitcoin rose 3% over the past 24 hours, to above $27,250, moving beyond $26,000, the amount that the largest digital asset has traded at since mid-August. The move is a win for Bitcoin, which is at struggling with historically low volatility and low trading volumes. Both are signs of waning interest in the crypto space.
“With the end of summer and the resumption of normal trading activity, the market is likely to see increased volatility again, after Bitcoin reached the minimum volatility levels ever recorder on a 30-day basis during the first two weeks of August,” said Matteo Greco, an analyst at digital asset group Fineqia.
Traders are piling into bullish bets on Bitcoin in the perpetual futures market, the most liquid market in all of crypto. On Binance, which has the world’s largest Bitcoin futures market, open interest—money locked up in active derivatives contracts—has surged 14% over the past 24 hours to above $2.6 billion, with positions overwhelmingly skewing bullish, according to data from Coinglass.
More broadly, as with the
Dow Jones Industrial Average
and
S&P 500
in the stock market, the looming Federal Reserve decision this week is likely to move crypto prices this week.
The Fed is widely expected to hold interest rates steady when it releases its next decision on Wednesday, with investors set to scrutinize signals from the central bank over whether another rate hike is likely in November.
Borrowing costs have risen to a generational peak since last year as the Fed sought to rein in inflation, heaping significant pressure on cryptos and stocks alike, because higher returns on risk-free cash tends to dampen demand for riskier bets such as Bitcoin.
Signs that the central bank is done hiking rates and may begin lowering them next year have the potential to accelerate recent gains for Bitcoin if traders start piling back into riskier assets—and it could be the catalyst cryptos need to shake off their funk.
Beyond Bitcoin,
Ether
—the second-largest crypto—rose 2% to $1,650. Smaller tokens, or altcoins, were also higher, with
Cardano
and
Polygon
both trading near 2% in the green. Memecoins were more mixed, with both
Dogecoin
and
Shiba Inu
gaining less than 1%.
Write to Jack Denton at [email protected]
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