Bitcoin Reaches- Bitcoin Tops $61K as Traders Await U.S. CPI and Yen Trade Updates
Bitcoin Reaches– In early Asian trading hours on Wednesday, Bitcoin (BTC) surged past $61,000, leading gains among major cryptocurrencies and reversing earlier losses from a significant price drop this month. Bitcoin saw an increase of over 3%, according to CoinGecko data, while other major tokens like Ethereum (ETH), Solana (SOL), Cardano (ADA), XRP, and BNB Chain’s BNB rose by up to 2.8%. In contrast, major memecoins Dogecoin (DOGE) and Shiba Inu (SHIB) only managed modest gains of 1%, indicating a more cautious sentiment towards riskier investments.
Despite Bitcoin’s impressive recovery, the broader market, as measured by the CoinDesk 20 (CD20) index, saw a more moderate 2.45% rise. This index tracks the largest tokens by market capitalization, excluding stablecoins.
The cautious optimism in the market comes as investors await crucial data from the U.S. Consumer Price Index (CPI) later this week. Crypto trading firm QCP Capital highlighted the market’s nervousness, noting that inflation numbers could influence the Federal Reserve’s decision on whether to cut interest rates by 50 or 25 basis points in September. The current odds are evenly split, adding to the uncertainty.
Bitcoin Surges Above $61K Amid Cautious Market Sentiment
The recent recovery has been a welcome change for traders who faced losses after a 20% market-wide drop earlier in August, driven by the unwinding of the yen carry trade. Richard Kelly, head of global strategy at TD Securities, expressed caution about declaring the end of this trade unwind. In a CNBC interview, Kelly noted, I’d push back on a lot of those narratives. You don’t have any real data to price your carry trades that we know. He also warned that further impacts from the carry trade could still be forthcoming, especially given the undervalued yen.
The Bank of Japan (BoJ) recently raised interest rates for the first time in over a decade, causing disruptions in global markets and risk assets, including Bitcoin. When rates were low, traders borrowed yen at a low cost to invest in higher-yielding assets, creating the carry trade. However, the recent rate hike has affected the profitability of these trading strategies, resulting in a ripple effect across various markets. BTC experienced a sharp 15% drop in a 24-hour period, marking one of its largest declines in recent years, with major tokens sliding by 22%.
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