Bitcoin Stalls as Market Focuses on U.S. Interest Rates

Investing.com— Bitcoin’s price traded flat on Tuesday as a recent rebound ran out of steam, even with ongoing capital inflows. Market attention has shifted to cues regarding U.S. interest rates due this week.

The world’s largest cryptocurrency had seen a rise following last week’s Federal Reserve interest rate cuts, which suggested better prospects for crypto. However, this momentum slowed as the market looked for further indications on potential additional rate cuts by the Fed. Retail demand for crypto has also declined, contributing to the weak broader sentiment.

Bitcoin remained steady at $63,625.0 by 08:30 ET (12:30 GMT).

Bitfinex Highlights Resistance Level for Bitcoin

Despite a notable resurgence after dipping below $54,000 earlier this month, analysts at Bitfinex advise caution, stating that a complete bullish reversal has yet to be confirmed.

In a recent note seen by CoinDesk, analysts indicated that Bitcoin needs to surpass the August high of $65,200 to signal the end of its prolonged downtrend. They noted that since reaching an all-time high of $73,666 on March 14th, Bitcoin has not eclipsed any peak before forming a new low, which fits the technical definition of a downtrend.

A solid move above the $65,200 level would indicate the conclusion of the interim downtrend and mark a continuation of the broader uptrend from October 2023, when Bitcoin was trading below $30,000.

Despite the recent price rise, the flattening of the cumulative volume delta indicator since Bitcoin crossed $63,500 suggests a slowdown in spot market buying, which prompts caution according to Bitfinex. This cumulative volume delta tracks the net buying and selling volume on centralized crypto exchanges over time.

Crypto Logs Second Week of Capital Inflows

Data from digital assets manager CoinShares revealed that crypto investment products registered a second consecutive week of capital inflows, totaling $321 million last week, though this was a slowdown from the prior week. Bitcoin was the primary focus for these inflows, although short-Bitcoin positioning also increased.

While Ether recorded its fifth straight week of outflows, many other altcoins experienced mild inflows. However, despite the inflows, trading volumes remain significantly lower than earlier this year, indicating weak sentiment towards crypto.

The upcoming U.S. presidential race adds uncertainty to the crypto landscape, with only Republican candidate Donald Trump expressing a pro-crypto stance, while Democratic nominee Kamala Harris is anticipated to continue the Biden administration’s regulatory push against crypto.

Crypto Prices Today: Altcoins Muted with Fed Cues Ahead

Overall, broader crypto prices mirrored Bitcoin’s lackluster performance, with Ether slipping 0.2% to $2,642.99.

XRP, SOL, and MATIC exhibited flat to slightly higher movements, whereas ADA outperformed with a 5% increase. Among meme tokens, DOGE gained 2.6%.

Traders are exercising caution ahead of remarks from various Fed officials this week, particularly Chair Jerome Powell. The PCE price index data— the Fed’s preferred inflation gauge— is also set to be released on Friday.

Ambar Warrick contributed to this report.