Sep 24 2024: Bitcoin’s price dropped on Tuesday, with a recent rally losing momentum despite continued capital inflows. Investors now shift their attention to a series of cues on U.S. interest rates expected this week.
The world’s largest cryptocurrency had surged following the Federal Reserve’s rate cut last week, which marked the beginning of an easing cycle—generally favorable for crypto assets.
However, this upward movement has slowed as traders seek clearer signals on the extent of future rate cuts. Broader market sentiment toward cryptocurrencies remains cautious due to declining retail interest and ongoing regulatory uncertainty.
By 01:53 ET (05:53 GMT), Bitcoin had slipped 0.9%, trading at $63,197.1.
Crypto Sees Second Week of Capital Inflows
Data released Monday by digital asset manager CoinShares revealed that crypto investment products attracted capital inflows for a second consecutive week, fueled by optimism over the Fed’s rate reduction.
Total inflows reached $321 million last week, though they had slowed from the previous week. Bitcoin dominated inflows, but short-Bitcoin positions also grew.
Ether marked its fifth consecutive week of outflows, while most other altcoins saw modest inflows.
Despite the two weeks of positive inflows, overall capital movement and trading volumes remain significantly lower than earlier this year, reflecting the still-muted sentiment towards cryptocurrencies.
The looming U.S. presidential race adds further uncertainty for the crypto market, with only Republican candidate Donald Trump taking a clear pro-crypto stance. Democratic nominee Kamala Harris is expected to continue the Biden administration’s stricter stance on crypto regulation.
Altcoins Pull Back as Fed Signals Awaited
Altcoin prices mirrored Bitcoin’s weakness, with Ethereum, the second-largest cryptocurrency, dropping 0.8% to $2,634.20.
XRP, SOL, and MATIC traded within a narrow range, while ADA outperformed, gaining 1.8%.
Among meme coins, DOGE declined by 1.6%.
Traders are exercising caution ahead of speeches from multiple Federal Reserve officials, especially Chair Jerome Powell, later this week. The PCE price index, the Fed’s preferred measure of inflation, is also scheduled for release on Friday, which could further influence the market.
