Bitcoin price saw a modest increase on Monday, recovering from bearish territory over the weekend. However, the possibility of further gains remained uncertain amid growing speculation about potential interest rate cuts by the U.S. Federal Reserve.
The main boost to Bitcoin came from a significant drop in the value of the dollar, which followed disappointing nonfarm payrolls data. This helped the cryptocurrency bounce back from its recent lows, reaching around $64,000 after dipping to about $59,000 last week, which was approximately 22% below its record high in March.
As of 01:31 ET (05:35 GMT), Bitcoin had risen by 1.7% in the past 24 hours to reach $64,247.2.
Market sentiment is now reflecting an increased likelihood of a 25 basis point rate cut by the Federal Reserve in September. Such a scenario tends to favor cryptocurrencies, as they typically perform well in environments characterized by low interest rates and ample liquidity.
The weakening labor market provides the Federal Reserve with additional motivation to consider rate cuts. However, it’s worth noting that Friday’s data follows five consecutive months of stronger-than-expected payrolls readings. Additionally, inflation, a key concern for the Fed, remains comfortably above the central bank’s target of 2% annually.
Despite its recent recovery, Bitcoin continues to trade within the range observed throughout much of March and April, fluctuating between $60,000 and $70,000. Interest in the cryptocurrency market has somewhat diminished, contributing to this stabilization.
Investment flows into Bitcoin products, particularly spot exchange-traded funds (ETFs) approved earlier this year, have slowed considerably over the past month, with Bitcoin ETFs experiencing outflows for the last three weeks.
The positive momentum in Bitcoin has spilled over into other major cryptocurrencies, although their gains were also subdued on Monday. Ethereum, the second-largest cryptocurrency, increased by 2.7% to reach $3,166.41. XRP saw a gain of 1.4%, while Solana rose by 2.8%.
Despite the broader gains across various cryptocurrencies, Bitcoin continues to dominate the market, accounting for nearly 55% of the total cryptocurrency valuation.
