Bitcoin Price Rises Amidst Economic Data Anticipation
Bitcoin’s price surged on Tuesday, extending its recovery from August declines as investors eagerly awaited major economic data releases this week. By 04:37 ET (08:37 GMT), Bitcoin had climbed 2.5% to $58,999.7 after a quiet trading day on Monday due to the Labor Day holiday in the U.S.
The cryptocurrency had experienced a significant 7% drop last week and had been on a downward trend for most of the previous month. Concerns over token distributions and mass sale events, particularly from the defunct Mt Gox exchange, contributed to the decline. Additionally, fears of a U.S. recession had caused steep losses in global financial markets at the start of August, impacting the crypto industry as well.
Investor focus now shifts to key economic data releases scheduled for the week, with the highly anticipated U.S. nonfarm payrolls report set to be published on Friday. The U.S. Federal Reserve is expected to initiate interest rate cuts later this month, and the payrolls data will likely determine the extent of the reduction, influencing overall risk sentiment. Lower interest rates typically benefit cryptocurrencies by freeing up more liquidity for speculative trading.
Market participants are currently pricing in a nearly certain 25 basis point rate cut in September, according to the CME Fedwatch Tool.
Analyzing Bitcoin’s Performance in September
Although Bitcoin has seen a modest uptick at the beginning of this week, historical data indicates a consistent pattern of underperformance in September. In the past 13 years, Bitcoin has delivered negative returns in nine Septembers, with an average loss of 5.36%.
Today’s Crypto Prices
In the broader cryptocurrency market, the second-largest digital token, Ether, rose by 1.2% to $2,499.99. Ether had experienced a significant 20% decline in August, marking its worst month since January 2022. Additionally, and saw gains of 4.38% and 2.89%, respectively, while dropped by 0.2%.
Overall, investors are closely monitoring economic data releases and central bank decisions to gauge the impact on cryptocurrencies, particularly Bitcoin. The current market environment suggests that lower interest rates could provide a favorable backdrop for digital assets, potentially fueling further price gains in the near term.