The price of Bitcoin surged on Wednesday, continuing its overnight rebound as risk sentiment improved and bets on a deeper U.S. interest rate cut increased. Investors are now turning their focus to upcoming inflation data.
Bitcoin rose by 3% to $61,024.7 by 01:19 ET (05:19 GMT), recovering all of its recent losses from the market rout last week. However, the cryptocurrency’s gains were still limited due to constrained institutional inflows and regulatory uncertainty in the U.S.
Bitcoin Extends Rebound on Positive PPI Data
The recent gains in Bitcoin and the broader crypto market were driven by softer-than-expected inflation data released on Tuesday. This data has raised hopes that upcoming inflation data will also be favorable, giving the Federal Reserve room to cut interest rates.
Traders are now considering the possibility of a 50 basis point cut, which could benefit crypto markets by increasing liquidity for speculative investments like cryptocurrencies.
Despite the rebound, Bitcoin remains within its trading range for the year and has struggled to reach new highs. The cryptocurrency has also underperformed compared to the recent rally in stock markets.
Mt Gox Distributions and Altcoin Performance
Reports of a $2 billion Bitcoin wallet linked to the defunct Mt Gox exchange conducting a test transaction have added pressure on Bitcoin’s recovery. The exchange is expected to sell off tokens stolen from clients during a 2014 hack, potentially impacting the market.
While Bitcoin’s rise has influenced broader cryptocurrency prices, major altcoins have seen limited gains. Ethereum rose by 2.6% to $2,720.45, while XRP and Litecoin saw more modest increases. Dogecoin, however, fell by 1%.
Overall, the cryptocurrency market continues to be influenced by a combination of economic data, regulatory uncertainty, and market dynamics. Investors should closely monitor these factors to make informed decisions about their investments.