Bitcoin experienced a 1% increase over the last 24 hours, reaching \(67,001.7 by 00:57 ET (04:57 GMT). Despite hitting a peak of over \)73,000 in early March, the cryptocurrency has mainly fluctuated within the \(60,000 to \)70,000 range.
In contrast to the notable resurgence in technology stocks this week, Bitcoin’s gains have been relatively limited, deviating from its typical correlation with the tech sector.
The recent halving event, which resulted in a 50% reduction in mining rewards, transpired without significant impact on Bitcoin’s price. Additionally, the introduction of the ‘Runes’ protocol, leading to a surge in on-chain activities and transaction fees, did not induce substantial price movements in Bitcoin.
Recent data revealed that crypto investment products, particularly Bitcoin exchange-traded funds, observed a consecutive two-week outflow of capital. This trend emerged amidst diminishing excitement following the approval of these ETFs by the U.S. earlier this year, which had previously driven Bitcoin to unprecedented highs in March.
While the approval of ETFs had propelled Bitcoin’s surge in the past, the potential for further escalation in its value now appears uncertain.
On Wednesday, the broader cryptocurrency market exhibited minimal price fluctuations, influenced by ongoing apprehensions regarding prolonged elevated U.S. interest rates.
Ethereum recorded a 2.4% increase, while XRP and Solana saw upticks of 0.3% and 2.2% respectively.
The positive momentum that drove crypto prices upward in the first quarter of 2024, fueled by anticipations of early Federal Reserve interest rate cuts, waned as April progressed.
The prevailing scenario of robust inflation figures and hawkish signals from the Fed led to the revision of expectations for a rate cut in June by traders.
The prolonged period of heightened interest rates poses challenges for the crypto sector, as it traditionally thrives in an environment characterized by low rates and ample liquidity, conducive to increased speculation.
Market attention this week centers on forthcoming data releases concerning the U.S. economy, crucial for shaping perceptions regarding future interest rate trends.
The scheduled release of first-quarter Gross Domestic Product (GDP) data on Thursday, alongside the Personal Consumption Expenditures (PCE) price index data on Friday – the Fed’s preferred inflation metric – are anticipated to provide valuable insights into the economic landscape.