Bitcoin price rose on Tuesday, tracking broader gains across risk-driven markets amid growing bets that the Federal Reserve will begin cutting interest rates in September.
The world’s biggest cryptocurrency rose 4.5% to $61,176.1 by 01:29 ET (05:29 GMT).
Selling pressure from concerns over token distributions by defunct crypto exchange Mt Gox also appeared to have cleared, while data on Monday showed crypto investment products saw some positive capital flows over the past week.
But despite recent gains, Bitcoin still remained close to a trading range seen through most of the year, as the token struggled to make new highs as interest in crypto dwindled.
Bitcoin buoyed by rate cut bets, Powell in focus
Bitcoin and crypto markets rose in tandem with a broader risk-on move across global markets, which saw Wall Street indexes log strong gains on Monday.
Risk sentiment improved amid growing conviction that the Fed will cut rates in September, with traders positioning for a 25 basis point reduction, CME Fedwatch showed.
On that front, focus this week is on an address by Fed Chair Jerome Powell at the Jackson Hole Symposium on Friday. While the Fed chair is unlikely to explicitly outline plans for a rate cut, he is expected to offer more encouraging comments, especially as recent data showed some cooling in U.S. inflation.
Lower rates bode well for risk-heavy, speculative assets such as crypto.
Yen appreciation presents some risks
But a sharp appreciation in the Japanese yen this week presented some risks to crypto, especially after a similar trend decimated crypto prices earlier in August.
Relatively lower interest rates in Japan make the yen a popular vehicle for speculative trading, with crypto serving as a major destination for these trades. But this carry trade was largely unwound by a sharp appreciation in the yen earlier in August, following hawkish signals from the Bank of Japan.
While the yen had then drifted lower over the past week, it appreciated sharply again on Monday, presenting potential headwinds to risk-driven markets.
Crypto price today: altcoins advance in tandem with Bitcoin
Broader crypto prices advanced on Tuesday, with world no.2 token Ether rising 2.2% to $2,681.48.
SOL added 3.7%, rising even as data showed investors heavily sold out of Solana investment products in the past week. Media reports said Mango Markers, which was once the biggest decentralized exchange on the Solana blockchain, was set to settle with the Securities and Exchange Commission over several violations of securities law.
Other altcoins also rose, with XRP, ADA and MATIC rising between 3% and 7%.
Among meme tokens, DOGE rose 4.7%.
