U.Today - Cryptocurrencies strengthened on the back of equity gains at the start of Monday, indicating increased optimism ahead of major central bank decisions.
This week, investors await the release of key economic data and the Federal Reserve’s July meeting slated for the week. The Fed's meeting will begin on Tuesday and end on Wednesday, with an announcement of interest rates and new monetary policy guidance.
Rates are widely expected to remain steady, but investors are looking for signals about when and how many rate cuts may occur this year. They will therefore be intently following any policy guidance issued by the central bank, as well as the post-meeting press conference with Fed Chairman Jerome Powell.
On Friday, the personal consumption expenditures (PCE) price index, the Fed's preferred inflation metric, came in as expected. In June, the PCE grew 0.1% from the previous month and 2.5% from a year ago.
Traders were recently pricing in a strong possibility of the first interest rate decrease occurring in September.
While Fed officials have repeatedly stated that they are looking for more evidence that inflation is steadily returning to 2% before cutting rates, Fed Chair Jerome Powell indicated earlier this month that the central bank may not wait until inflation reaches this target before cutting rates.
Crypto market reacts
Bitcoinreached its highest level since mid-June, reaching $69,868 in the early trading session today as expectations for U.S. Federal Reserve interest-rate cuts boosted investor sentiment.At the time of writing, BTC was up 2.65% in the last 24 hours to $69,520. Several cryptocurrencies were likewise trading in green. Ethereum, Solanaand Dogecoinposted gains between 2% and 4%. Bitcoin spinoff Bitcoin Cashgained as much as 15%.
The Fed meeting later this week is likely to lay the framework for the commencement of a rate-cutting cycle, which is considered favorable for cryptocurrencies; this expectation lifted market sentiment.
Bitcoin is around $4,400 lower than its all-time high of about $74,000 in March. Inflows into specific U.S. exchange-traded funds have raised Bitcoin's value this year