Bitcoin reclaimed the $67,000 mark for a brief period, before paring some gains to trade 2.5 higher on the day at $66,893.7 by 07:29 ET (11:29 GMT).
The world’s largest cryptocurrency tumbled from record highs over the past week, sinking as low as $60,000 as traders locked-in profits from a recent melt-up to record highs.
But the token rebounded sharply from those lows as capital flows into the recently-approved spot exchange-traded funds remained robust. However, sustained outflows from Grayscale Bitcoin Trust (BTC) (NYSE: GBTC) provided some pressure on spot Bitcoin prices.
Anticipation of the upcoming “halving” event, where the Bitcoin network’s generation of new tokens will be slashed by 50%, also kept buying interest in the cryptocurrency upbeat.
The halving event is expected to occur some time in April with the generation of the 740,000 block, and is likely to further limit Bitcoin supply. But markets remain unclear over the exact timing of the event.
Still, a bigger recovery in Bitcoin price was largely limited by strength in the dollar. The greenback raced to a one-month high on Monday as dovish signals from major global central banks saw investors largely favor the dollar as the only high-yielding, low-risk currency.
Anticipation of more signals on U.S. interest rates- from key personal consumption expenditures data, which is the Federal Reserve’s preferred inflation gauge- also kept the dollar upbeat. The data is due this Friday.
A string of Fed officials are also set to talk through this week, offering up more cues on the bank’s plans for interest rate cuts in 2024. Last week’s Fed meeting showed the central bank still saw 75 basis points worth of cuts this year.
From a broader perspective, the crypto market’s positive start to the week was also helped by BlackRock’s latest foray into asset tokenization. Dubbed ‘BUIDL,’ the world’s largest asset manager’s tokenized asset fund will be built on the Ethereum network. It represents BlackRock’s first-ever tokenized fund issued on a public blockchain.
Moreover, the upward momentum of Bitcoin may also be influenced by a slowdown in selling pressure from the Grayscale Bitcoin Trust (GBTC). Analysts cite Genesis’ sale of shares as a contributing factor to the decrease in GBTC outflow, thus contributing to BTC’s rise.
Lastly, the latest macro indicators continue to paint a bullish picture, with the Swiss National Bank (SNB) making an unexpected move by lowering the benchmark interest rate, signaling the start of a global easing cycle.
Joining this trend, the Central Bank of Mexico also implemented rate cuts, while the Fed, the European Central Bank, and the Bank of England are expected to make similar moves in the coming months.
[Ambar Warrick contributed to this article]
Source: Cryptocurrency - investing.com
