Despite hopes that economic data would help revive digital asset markets, Bitcoin and other cryptocurrencies experienced a slip on Monday. Bitcoin’s price fell by less than 1% over the past 24 hours, settling at $25,700. This move further distances it from the $26,000 level at which it has traded for most of the previous month. In fact, these recent prices are close to the lowest levels since mid-June.
Antoni Trenchev, managing partner at crypto lender Nexo, commented on the current state of Bitcoin. He noted that while Bitcoin has not experienced its typical September slump this year, investors should not become too complacent with its current price stability. The fact that Bitcoin has remained around $25,800 for the past 10 days suggests that when a breakout occurs, it is likely to be significant.
The lack of action and passive nature of crypto prices have been ongoing trends for several months. During this summer, Bitcoin saw its lowest recorded volatility, and trading volumes reached their lowest point in four years in August.
Traders Anticipate Macroeconomic News as Bitcoin Looks to Stock Market for Direction
Traders are closely monitoring major macroeconomic news this week as they search for potential catalysts that could impact the market. Of particular interest is Bitcoin, which has the potential to move in sync with the Dow Jones Industrial Average and S&P 500, influenced by significant inflation data scheduled for release on Wednesday.
The outlook for interest rates remains a crucial factor for risk-sensitive assets, especially as they have already reached a generational peak. The Federal Reserve’s decision to increase borrowing costs last year in an effort to control inflation has put interest rates at remarkably high levels. As a result, assets that are sensitive to risk tend to experience reduced demand when rates are elevated.
According to Trenchev, co-founder of crypto lending platform Nexo, the U.S. inflation data released this week will play a pivotal role in determining the possibility of another interest rate hike this year. Additionally, it will help gauge how long interest rates need to remain at restrictive levels. The clarity on these two key points will likely dictate whether Bitcoin can sustain a value above the mid-$20,000 range.
Moving beyond Bitcoin, Ether—the second-largest cryptocurrency—experienced a decline of 2%, falling below the $1,600 mark. Other smaller cryptocurrencies, such as Cardano (-2%) and Polygon (-4%), also showed weakness. Even memecoins, including Dogecoin (-2%) and Shiba Inu (-3%), were not exempt from losses.