Bitcoin Recovery Slows, More Positive Cues Awaited

Bitcoin price rose on Wednesday, extending a rebound from over five-month lows as bargain buyers stepped in and as sentiment improved slightly

Bitcoin price rose on Wednesday, extending a rebound from over five-month lows as bargain buyers stepped in and sentiment improved slightly, although the token’s recovery appeared to be running out of steam.

This trend was also reflected in broader crypto prices, where gains slowed from the prior session as the factors behind Monday’s rout- concerns over a U.S. recession, Japanese interest rate hikes and tensions in the Middle East- continued to weigh on sentiment.

Bitcoin rose 1.9% to $56,952.4 by 01:26 ET (05:26 GMT). The token had slumped as low as $49,000 on Monday before rebounding from those levels.

Bitcoin recovery slows, more positive cues awaited

Gains in the world’s biggest cryptocurrency slowed after it rebounded nearly 4% on Tuesday.

The token still traded below levels seen before Monday’s rout, as crypto markets also struggled with the prospect of a mass sale by the U.S. government, as well as waning interest in the crypto derivatives market.

Risk-off sentiment saw crypto derivatives, mainly exchange-traded funds (ETFs), log steep outflows in the past week.

Optimism over an improved regulatory environment in the U.S. also waned as the 2024 presidential race heated up. Democratic nominee Kamala Harris was seen catching up with Republican nominee and pro-crypto candidate Donald Trump, a Bloomberg poll showed last week.

IMF flags progress in El Salvador talks, but Bitcoin a pain point

The International Monetary Fund (IMF) said on Tuesday that it had made progress in talks with El Salvador over a funding program for the Central American country, but its adoption of Bitcoin still remained a point of contention, a Reuters report showed.

The IMF and El Salvador appeared to have reached “preliminary understandings” on improving the country’s economy, and had discussed policies that could be supported by the IMF.

But the fund noted that while several risks projected from the country’s adoption of Bitcoin had not yet materialized, negotiations with El Salvador will be aimed at mitigating said risks.

El Salvador adopted Bitcoin as legal tender in 2021, and had outlined sweeping plans to build infrastructure themed around the cryptocurrency. But these plans did not come to pass, as the country saw little improvement in its fiscal woes, and also found few takers for its planned "Bitcoin bonds" to fund the projects.

Crypto price today: Altcoins mixed as rebound slows

Broader crypto prices were a mixed bag on Wednesday, as a broader recovery in the sector lost momentum.

World no.2 token Ether fell 0.7% to $2,504.90, while XRP lost 0.4%.

ADA and SOL rose 1.3% and 7.2%, respectively.

Among meme tokens, DOGE fell 0.9%, while SHIB lost 1.4%.

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