Bitcoin Regains $57K Amid Market Shift Towards Fed Policies
Bitcoin reversed a 4% loss to regain the $57,000 mark, with Ether surpassing $3,000. The market is now shifting its focus from Mt. Gox repayments to U.S. Federal Reserve policies, with traders eyeing upcoming economic data releases and Fed Chair Jerome Powell’s testimony later this week.
In the European morning hours on Monday, Bitcoin bounced back from a 4% loss during the Asian trading session, reaching $57,000. Meanwhile, Ether climbed back over $3,000 after dipping below this level on Friday. Cardano (ADA) led gains with a 3.3% rise over the past 24 hours, while Solana (SOL), BNB Chain (BNB), and Dogecoin (DOGE) were up at least 1%.
Celestia’s TIA saw significant gains among tokens with market capitalizations between $1 billion and $5 billion, jumping 15% ahead of its flagship Modular Summit conference scheduled for Thursday. The broad-based CoinDesk 20 index, which tracks the largest tokens, also edged higher, reversing a 7% loss from earlier in the day.
BTC traders are now closely monitoring U.S. Federal Reserve speeches and policies, as the market has largely priced in the impact of the defunct crypto exchange Mt. Gox’s repayments. Bitcoin experienced a steep fall last week, dropping over 8% within a few hours on Friday, reaching as low as $53,600 shortly after Mt. Gox started transferring millions worth of the token to the Japan-based bitBank exchange. Despite this, bitBank’s trading desk indicated in a Monday email to CoinDesk that they anticipate a lesser market impact from Mt. Gox’s wallet movements moving forward.
“Bitcoin was already fluctuating around $54,000 by the time Mt.Gox’s trustee officially announced that they had commenced repayment,” said Yuya Hasegawa, a crypto market analyst at bitBank. “The price bounced back after the announcement and briefly recovered to $58,000 during the weekend.”
“The market had overly priced in the repayment before it actually started, and later reacted to the (U.S.) jobs report on Friday, which was announced after the beginning of Mt.Gox’s repayment,” Hasegawa added. “This suggests that the market’s concern for Mt.Gox’s repayment is starting to wane and their focus is shifting back to the Fed’s policy decisions.”
The latest U.S. Consumer Price Index (CPI) report is scheduled for Thursday. Additionally, Federal Reserve Chair Jerome Powell will testify to Congress on Tuesday and Wednesday, potentially offering clues about the central bank’s intentions regarding monetary policy in the coming months.
Despite this, some market observers expect subdued price action to continue, citing the summer holiday months.
“It’s a case of more summer blues for investors,” said Philippe Bekhazi, CEO and co-founder of digital asset services firm XBTO, in an email. “The bottom line is sellers are more motivated than buyers right now. Lots of people are on holiday, many small miners are shutting down, and long-term holders are trimming their positions.”
“However, the key thing here is that this pattern is not really any different from what we normally see following the months after a bitcoin halving event,” Bekhazi continued, referring to the seasonality commonly observed in bitcoin market cycles.