Bitcoin Price Update

Bitcoin price rose slightly on Wednesday, extending an overnight rebound as risk sentiment improved amid increasing bets on a deeper U.S. interest rate cut following soft PPI data and an in-line CPI report.

Current Price Movement

The Bitcoin added 1% to $60,039.0 by 10:16 ET (10:16 GMT), having now recouped all of its steep losses logged during a market rout last week.

However, further gains in Bitcoin were still limited as institutional inflows into the token remained constrained, while uncertainty over crypto’s regulatory outlook in the U.S. also weighed.

Factors Driving Bitcoin’s Rebound

Marginal gains in Bitcoin were driven chiefly by softer-than-expected producer price index inflation data released on Tuesday. This data ramped up hopes that consumer price index (CPI) data, due on Wednesday, would ease as expected. Softer inflation gives the Federal Reserve more headroom to begin cutting interest rates in September.

Bets on a 50 basis point cut edged higher after Tuesday’s PPI reading, although traders were still pricing in the possibility of a 25 bps reduction. Lower interest rates bode well for crypto markets as they increase liquidity directed towards speculative markets, like crypto.

Latest CPI Data

New U.S. inflation data for July was released on Wednesday, largely meeting expectations. The CPI increased by 0.2% in July, up from a decline of 0.1% in June and matching forecasts for a 0.2% rise. Year-over-year, the CPI was up 2.9%, slightly below the expected 3% and the June rate of 3%.

The core CPI, excluding food and energy prices, also rose by 0.2% in July, consistent with expectations and slightly higher than June’s 0.1% increase. Yearly, core CPI increased by 3.2%, in line with forecasts and a slight decrease from June’s 3.3%.

Ongoing Market Context

Despite this week’s rebound, Bitcoin remained close to a trading range seen for most of the year and struggled to make new highs after a March rally. The token has lagged behind stock market rallies in recent sessions, facing underperformance amid renewed regulatory uncertainty in the U.S.

Polls show a close presidential race between Donald Trump and Kamala Harris. Trump has maintained a pro-crypto stance, while Harris has not directly addressed the industry.

Mt Gox Distributions

Adding to Bitcoin’s recovery were reports of a wallet, which has received $2 billion in Bitcoin from defunct crypto exchange Mt Gox, initiating a test transaction on Tuesday. It remains unclear how much Bitcoin the exchange holds, but it is expected to increase selling pressure on Bitcoin as it returns tokens stolen from clients during a 2014 hack.

Altcoin Market Overview

Broader cryptocurrency prices rose along with Bitcoin, but gains across major altcoins were limited. Ether slipped 1% to $2,641.76, while XRP and ADA fell by 1% and 1.4%, respectively. SOL decreased by 0.5%. Among meme tokens, DOGE lost more than 3%.