Bitcoin's price showed little movement on Wednesday, pausing after recent losses as traders awaited more information on U.S. interest rates from the Federal Reserve and upcoming inflation data.
After a brief rebound, the world's largest cryptocurrency faced pressure this week as traders factored in a potential slowdown in the Fed's rate cuts in the coming months. The strength of the dollar also weighed on the broader crypto markets, dampening risk appetite.
Bitcoin edged down 0.1% to $62,466.2 by 01:50 ET (05:50 GMT).
Fed minutes and inflation data in focus
All eyes were on the release of the minutes from the Fed's September meeting, scheduled for later on Wednesday, for insights into future interest rate decisions. The Fed had cut rates by 50 basis points in September and signaled the start of an easing cycle.
Strong payrolls data from last week raised doubts about the necessity of further rate cuts, with traders now pricing in an 84.1% chance of a 25 bps cut in November and a 15.9% chance of rates remaining unchanged.
Thursday's inflation data will also be closely watched, as the Fed indicated that future rate cuts will be influenced by inflation and labor market conditions.
Lower interest rates are generally positive for speculative assets like cryptocurrencies. However, a slower pace of rate cuts could make traders cautious in the short term, especially if the U.S. terminal rate is set higher.
While U.S. stocks rebounded overnight, the crypto market largely remained unaffected.
Bitcoin's price rangebound with lack of catalysts
Despite recent fluctuations, Bitcoin has been stuck in a $50,000 to $65,000 trading range since June. Traders are looking for clear catalysts to drive crypto prices higher, including the introduction of options offerings on BlackRock's spot Bitcoin ETF.
Bitcoin did not fully participate in the stock market rally following the Fed's rate cut in September and faced selling pressure last week due to increased risk aversion amid geopolitical tensions.
One factor supporting crypto prices has been the possibility of a Donald Trump victory in the 2024 presidential elections, as indicated by betting platform Polymarket.
Cryptocurrency prices today: altcoins remain subdued
While broader cryptocurrency prices inched up, they mostly remained rangebound. The second-largest crypto, Ethereum, rose 0.9% to $2,450.46.
Other altcoins such as Litecoin, Ripple, and Cardano saw marginal gains, while meme token Dogecoin added 1.2%.
Overall, the crypto market continues to face uncertainty as traders await further guidance from the Fed and monitor economic indicators like inflation data. It's important for investors to stay informed and adapt their strategies based on market developments to protect and grow their investments.