Bitcoin and other cryptocurrencies are showing signs of advancement, as traders aim to break free from a stagnant range that has persisted for the past month. In the past 24 hours alone, the price of Bitcoin has risen by 1% to exceed $26,750. This upward movement is significant, considering that Bitcoin has been hovering around the $26,000 level since mid-August. If the price manages to surpass the $27,000 mark, it would be a psychological victory for traders who have been grappling with historically low volatility and trading volumes in the crypto space.
Similar to the impact of the Dow Jones Industrial Average and S&P 500 in the stock market, the fate of crypto prices is likely to be influenced by the impending Federal Reserve decision this week. Many expect the Fed to maintain interest rates at their current level when it releases its next decision on Wednesday. Investors will be paying close attention to the language used by the central bank, as any hints regarding a potential rate hike in November could have significant repercussions for cryptocurrencies.
The rise in borrowing costs over the past year has placed immense pressure on both cryptos and stocks. As the Fed sought to curb inflation, higher returns on risk-free cash have dampened demand for riskier assets like Bitcoin. However, if there are indications that the central bank is no longer pursuing rate hikes and may consider lowering them next year, it could potentially trigger a resurgence in Bitcoin as traders flock back to riskier investments. This might just be the catalyst needed for cryptocurrencies to shake off their lethargy.
In addition to Bitcoin, Ether, the second-largest cryptocurrency, saw a modest increase of less than 1%, reaching $1,630. Altcoins, which are smaller tokens, experienced minimal movement, with Cardano and Polygon trading slightly above flat levels. The memecoins market displayed mixed results, with Dogecoin slipping by approximately 1% and Shiba Inu shedding less than 1%.