Bitcoin's price saw a slight drop on Monday after a weekend rebound lost momentum, but optimism surrounding potential interest rate cuts kept the cryptocurrency trading near a one-month high. The broader crypto market also saw a retreat after significant gains following comments from Federal Reserve Chair Jerome Powell hinting at rate cuts. The weakening dollar, which hit a 13-month low, also contributed to the rise in crypto prices.
At 01:59 ET (05:59 GMT), Bitcoin was down 0.3% to $63,952.7. However, further gains were limited by the strength of the dollar. The appreciation of the yen earlier in the month had unsettled risk-driven markets, impacting speculative assets like crypto.
Bitcoin's Surge Tied to Rate Cut Expectations
Bitcoin experienced a sharp increase in the past two days following Powell's comments indicating an impending rate cut. The markets are now preparing for a potential rate cut in September, with uncertainty over whether it will be a 25 or 50 basis point reduction. The upcoming inflation data release on Friday will likely influence the decision on rate cuts. Lower rates are favorable for speculative assets such as crypto as they increase liquidity for investment.
RFK's Support Boosts Crypto Amid Pro-Crypto Regulatory Outlook
Independent presidential candidate Robert F. Kennedy Jr, known for his pro-crypto stance, suspended his campaign and endorsed pro-crypto Republican nominee Donald Trump. This move led to gains in the crypto market, with speculation rising about a potential Trump victory over Democratic nominee Kamala Harris, which could result in friendlier regulations for crypto. Trump has expressed support for crypto and recently spoke at a Bitcoin conference.
Crypto Market Update: Altcoins Dip After Weekend Rally
Following a weekend rally, most altcoins saw a decline as markets awaited more clarity on U.S. interest rate cuts. The second-largest token, Ethereum, dropped 1% to $2,735.15, while other altcoins like Litecoin, Ripple, and Dogecoin remained relatively stable. Shiba Inu experienced significant losses, falling by 5.8%, while meme token Dogecoin also dropped by 1.7%.
Analysis:
The article highlights the impact of interest rate cut expectations and political endorsements on the cryptocurrency market. The anticipation of rate cuts and favorable regulatory outlooks have led to price fluctuations in Bitcoin and other altcoins. Investors should closely monitor central bank decisions and political developments to make informed decisions about their cryptocurrency investments.