Bitcoin’s price witnessed a rise on Thursday, following a broader rally in risk-driven markets, particularly in stocks. However, the cryptocurrency still remained fragile after experiencing steep losses in the previous week. The strength in the dollar, driven by a stronger consumer price index inflation reading, limited the overall gains in cryptocurrencies. Additionally, the prospect of a smaller interest rate cut by the Federal Reserve next week also impacted the sentiment towards crypto.
The recent presidential debate on Tuesday had a notable impact on Bitcoin’s price movement. During the debate, Vice President Kamala Harris was seen gaining an edge over former President and pro-crypto candidate Donald Trump. This shift in perceptions caused fluctuations in the market, leading to increased uncertainty. While Trump openly declared support for the crypto industry, Harris is expected to continue the Biden administration’s scrutiny of the sector due to alleged instances of fraud.
Bitcoin’s gains were also influenced by an overnight surge in technology stocks, particularly after positive comments on artificial intelligence demand from NVIDIA Corporation CEO Jensen Huang. Despite the rally, Bitcoin remained stuck in a trading range between $50,000 to $60,000 for most of the year. Breaking substantially above $60,000 has been a challenge, as the cryptocurrency lacks significant positive cues to drive its price higher. The token was still recovering from steep losses from the previous week, attributed to the broader rout in risk-driven markets.
The impact of Bitcoin’s price movement was reflected in the performance of other cryptocurrencies as well. Ethereum, the world’s second-largest crypto, was up by 1.8% at $2,368.10, in alignment with Bitcoin’s gains. Altcoins like SOL, XRP, ADA, and MATIC also experienced upward movements, with ADA leading the pack with a 5.1% increase. Among meme tokens, DOGE witnessed a rise of 2.9%, showcasing the interconnected nature of the cryptocurrency market.
The market sentiment was also influenced by speculation surrounding the Federal Reserve’s decision on interest rates. A stronger-than-expected reading on core CPI led traders to anticipate a 25 basis points cut by the Fed, rather than a more aggressive 50 bps reduction. The upcoming producer price index data is expected to provide further insights into U.S. inflation trends, which will likely impact the future movement of cryptocurrencies.
Bitcoin’s price movement is not only influenced by its internal dynamics but also by external factors such as political events, market trends, and regulatory developments. As the cryptocurrency market continues to evolve, it is essential for investors to carefully analyze these interconnections to make informed decisions and navigate the inherent risks associated with this volatile asset class.