Ether, the second-largest cryptocurrency by market capitalization, also recorded a 1.5% decline to $1,575. Other smaller cryptocurrencies or ‘altcoins’ like Cardano and Polygon reported losses of 1% and 2% respectively. Meme-based cryptocurrencies such as Dogecoin and Shiba Inu were not immune to the downward trend, with both falling by 2% and 1%.
This decrease in cryptocurrency prices coincides with historically low trading volumes and volatility in the crypto market, suggesting a decline in investor interest. The market continues to anticipate a decision from the Securities and Exchange Commission regarding spot Bitcoin exchange-traded funds (ETFs). However, this potential catalyst may take several months to materialize.
External macroeconomic factors have also been influencing cryptocurrency prices. Similar to traditional stock market indices like the Dow Jones Industrial Average and S&P 500, Bitcoin’s price movements have shown responsiveness to shifts in interest rate outlooks. With interest rates currently at generational highs, increased returns on risk-free cash or government debt could deter investors from venturing into riskier assets such as Bitcoin.
Investors are closely watching whether the Federal Reserve will increase interest rates in November. Subsequent decisions on lowering rates are also critical considerations. Strong economic data could discourage the Federal Reserve from reducing rates while signs of economic weakness could prompt a more accommodative stance.
Economic indicators due this week could potentially influence these decisions and consequently impact cryptocurrency markets. These include Monday’s Dallas Fed manufacturing activity data for September and the Chicago Fed national activity index for August. Later in the week, revisions to the U.S. gross domestic product over the past five years and the personal-consumption expenditures index, the Fed’s preferred inflation measure, are expected.
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Source: Cryptocurrency - investing.com
