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Bitcoin briefly reclaimed its recent, higher position above $31,000 on Monday, only to dip slightly below that threshold.
The leading cryptocurrency in terms of market capitalization, with recent trading at $30,690, experienced a nearly 2% increase in value over the last 24 hours. This surge in price indicates a renewed sense of enthusiasm among investors, reminiscent of the optimism observed when BlackRock and other major financial services companies filed for spot bitcoin ETFs in mid-June, along with other crypto-friendly developments throughout the month.
On Thursday, Bitcoin surpassed the $31,000 mark in its latest trading session. However, it experienced a decline alongside other assets due to renewed concerns about inflation triggered by an unexpectedly strong ADP private sector jobs report. The price of Bitcoin even dropped below its recent support level of $30,000. Nonetheless, these worries appeared to dissipate later on, as Bitcoin managed to stay slightly above this threshold. In the afternoon, the cryptocurrency saw a sudden surge of over 2% within approximately 90 minutes, before eventually retracing its gains.
Bitcoin has experienced a remarkable 20% increase in value over the last month, with a significant portion of these gains occurring after the spot BTC filings. A recent report from Standard Chartered Bank, a British multinational bank, predicted that bitcoin could reach $50,000 by the end of this year and surpass $120,000 by the conclusion of 2024.
"Today’s lift in digital assets comes from several June tailwinds that are only now being digested," Mark Connors, head of research for digital asset management firm 3iQ, wrote to CoinDesk. "June price action was BTC dominant due to the slew of spot BTC ETF filings," he wrote, also noting favorable comments about the application by former Securities and Exchange Commission (SEC) Chair Jay Clayton.
In a CNBC appearance Monday, Clayton said that if the filings addressed certain protections that bitcoin futures ETFs include, that it would be difficult to "resist approving a (spot) bitcoin ETF."
Connors wrote that investors may also be slowly warming to the possible approval of the Congressional Digital Assets Market Structure and Investor Protection Act, which would establish whether a digital asset is decentralized. "If passed into law, such a determination can be meaningful as most developers do not want to join a centralized entity bound by securities laws," he wrote.
Ether has seen a recent increase in trading, reaching approximately $1,890, which reflects a 1.8% rise from the same time on Sunday. Furthermore, other prominent cryptocurrencies have transitioned from a decline to an increase, or have surged even further into positive territory. Notably, MATIC and ADA, the tokens associated with the smart contracts platforms Polygon and Cardano, respectively, experienced significant gains of more than 6% and 2%. Additionally, BNB, the native cryptocurrency of the Binance exchange, recently witnessed a rise of over 4%.
The CoinDesk Market Index, which serves as an indicator of the performance of cryptocurrency markets, has recently surged by 1.9%.
Equity indexes staged a strong recovery following an uncommon week of decline in 2023, with both the S&P 500 and Nasdaq Composite edging higher. Investors held optimistic expectations for the release of the June U.S. Consumer Price Index (CPI) on Wednesday. In May, the CPI decreased to 4% from the nearly 9% figure reported almost a year ago, signaling a positive trend.
Consensus projections indicate that the index is poised to dip below 4%. However, in a recent note, Edward Moya, a senior analyst at Oanda, shared an intriguing perspective. Moya suggests that the Consumer Price Index (CPI) might potentially plummet to 2.8%, even in the face of persistently inflated housing prices. The seemingly contradictory data, coupled with last week's perplexing job statistics (where nonfarm payrolls experienced a slight decline), could add significant complexity to the highly anticipated decision of the U.S. central bank regarding an interest rate hike later this month.
The Federal Reserve probability tracker is currently forecasting a more than 90% likelihood of a 25 basis point rate hike (bps), but critics of the Fed's more than year-long monetary hawkishness believe bankers are overstepping and risk casting the economy into a recession. "Even if we get a hot report, the Fed is locked into delivering a quarter-point rate rise," Moya wrote. "Following last month’s pause, the Fed seems positioned to remain aggressive with signaling tightening until we see a much more meaningful slowdown."
Aggressive rate increases have weighed heavily on crypto markets. Moya expects bitcoin to remain at about $30,000 "as Wall Street awaits any US Bitcoin ETF update, and as market expectations for a 25 basis point hike at the next Fed meeting seems very likely."
Source Coindesk
