Bitcoin rose less than 1% in the past 24 hours to reach $28,600, as the largest digital asset briefly rose above $29,100 in recent trading — its highest level since last June, when the cryptocurrency’s crash accelerated in a brutal bear market. Rising from around $16,500 at the start of the year, bitcoin’s rally has sparked calls for a fresh bull market, with traders eyeing the psychologically important $30,000 level – where prices stood before the June lows – for the go-ahead.
“The optimistic mood in the stock market has brought the price of bitcoin back to the upper end of the March trading range,” said Alex Kuptsikevich, an analyst at brokerage FxPro. “A potential upside target within the formation is the area near $35,000… However, near $30,000 already, Bitcoin could face selling pressure in the short term.”
In fact, Bitcoin gained along with stocks, as it rose along with
Dow Jones Industrial Average
And
Standard & Poor’s 500
As investors shake off panic fears about the health of banks in recent weeks and look forward to the inflation picture.
The macroeconomic backdrop – linking cryptocurrencies and stocks – remains key for Bitcoin, as traders weed out the severe and growing headwinds against the digital asset to focus on the interest rate outlook. Higher rates dampen demand for more risk-sensitive assets such as cryptocurrencies. The Federal Reserve has raised interest rates higher since last March in an effort to rein in inflation that has been high for decades.
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Signs that inflation is cooling — combined with concerns about the health of lenders, an unintended consequence of higher interest rates — have spurred bets that the Fed will be more accommodating with monetary policy and may cut interest rates soon, boosting cryptocurrencies.
Data in the coming days may confirm, or shake up, that narrative, with a third estimate of US GDP on Thursday ahead of February’s personal consumption expenditures (PCE), the Fed’s preferred measure of inflation.
“Investors seem to be putting themselves and their books ahead of some important data this week, namely GDP and PCE inflation,” said James Lavish, managing partner at Bitcoin Opportunity Fund.
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Lavish said that bullish traders want to see both indicators weaker. The logic is that a weaker economy, which will be evident from lower GDP, may prompt the Fed to ease interest rate policy. Likewise, cooling PCE inflation could lead to a negative shift from the central bank, perhaps confirming to market rates that the Fed will keep interest rates unchanged when the Policy Committee meets in early May.
But it’s not all risk.
“With late effects from rapid rate increases ahead of us, there is a high probability that we will either have another credit event or head straight into a recession,” Lavish said. “I personally would be cautious about pricing here, and only add opportunistically.”
beyond bitcoin,
ether
– the second largest cryptocurrency – down 1% to $1,800. Minor cryptocurrencies or altcoins were weaker, with both
Cardano
And
ribbed
down 2%. It was more of the same for the Mykonos, though
Dogecoin
And
shiba inu
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shedding 2%.
Write to Jack Denton at [email protected]
