The world’s biggest cryptocurrency jumped 3.5% in the past 24 hours to $69,367.6 by 08:40 ET (12:40 GMT). It had fallen as low as $66,000 on Tuesday.
Bitcoin clocked wild swings in recent sessions, having also risen as far as $72,000 as sentiment towards cryptocurrencies remained on edge before more definite cues on U.S. interest rates.
High rates diminish the appeal of risk-driven assets like crypto. They also present a tougher outlook for the sector by keeping liquidity levels low.
This saw traders pivot out of Bitcoin and other cryptos earlier this week, and into assets more insulated against rate jitters, such as the dollar.
While data showed Bitcoin and other crypto investment products saw $2 billion worth of inflows in the first week of June, this was not reflected in the price.
The Fed is widely expected to keep rates unchanged at the conclusion of a two-day meeting later on Wednesday. But the central bank could potentially present a more hawkish outlook, especially in the face of sticky inflation and a resilient labor market.
Before the Fed decision, key consumer price index data is due on Wednesday and is also expected to show inflation remained sticky in May.
Recent jitters over the labor market and inflation saw traders scale back bets on a rate cut in September, which boosted the dollar and weighed on crypto prices.
Beyond Bitcoin, major altcoins also rose higher later on Wednesday, recovering from the declines they saw earlier in the day.
World no.2 token Ether advanced over 2% to $3,609.66, while ADA, XRP, and SOL rose between 1.3% and 3.5%. Among meme tokens, DOGE and SHIB rose 2.1% each.
Bitcoin ETFs saw outflows for the second consecutive day as traders likely reduced risk ahead of key macroeconomic reports scheduled for later Wednesday.
According to crypto research firm SoSoValue, the eleven ETFs saw a combined net outflow of $200 million on Tuesday, the highest since May 1, when outflows reached $580 million. These redemptions occurred during a Bitcoin sell-off, where the asset briefly dropped to $66,200 before recovering.
Grayscale’s GBTC led the outflows, accounting for $120 million and continuing its trend as the worst-performing ETF by outflows since its launch in January, accumulating a total of $18 billion in outflows.
Other ETFs, including Ark Invest’s ARKB, Bitwise’s BITB, Fidelity’s FBTC, and VanEck’s HODL, recorded outflows ranging from $56 million to $7 million. None of the ETFs reported any inflows.
Traders attributed these outflows to precautionary moves ahead of the CPI reading, and the conclusion of the two-day Federal Open Market Committee (FOMC) meeting, during which the Federal Reserve’s monetary policy decisions will be announced.
“Markets are [in] risk-off mode ahead of CPI and FOMC tomorrow. This month’s FOMC will also release the Dot Plot, which informs the market how many cuts the Fed anticipates for the rest of 2024,” QCP Capital said in a broadcast message on Tuesday.
However, the long-term bullish outlook remains unchanged, QCP added.
Source: Cryptocurrency - investing.com
