Bitcoin price rises back above $43,000 as market expects another Fed rate pause this week
The price of bitcoin rebounded above the $43,000 mark with the market expecting the U.S. Federal Reserve to pause rates again later this week.
There were also signs that outflows from Grayscale Investments' spot bitcoin ETF could be slowing.
"Only about an hour into trading but IBIT is ahead of GBTC in volume so far," Bloomberg Intelligence ETF analyst James Seyffart wrote on X. "Today *could* be the first day where one of the newborn nine trades MORE than GBTC. Currently $155 million to $113 million."
Tuesday's price action caused the liquidation of over $60 million of cryptocurrency short positions, according to Coinglass data . In the past 24 hours, liquidated bitcoin leveraged positions spiked to over $40 million, with over $24 million of these being shorts.
The largest digital asset by market capitalization has increased by over 2% in the past 24 hours and was changing hands for $43,201 at 12:00 p.m. ET, according to The Block data .
The price of bitcoin has risen over the $43,000 mark. Image: The Block.
Possibility of a Fed rate pause
Today's bitcoin uptick comes as the market is broadly expecting the Federal Reserve to pause rates at this week's FOMC meeting. According to the CME FedWatch tool , there is a 97.9% chance that the Fed funds rate will remain at its current target range of 5.25%–5.50%.
Ryze Labs emphasized bitcoin's classification as a "risk-on" asset, indicating the potential for BTC +2.09% to outperform in a robust bull market, a scenario that could be facilitated by a rate pause and potential rate cuts.
However, Ryze Labs Founder Mathew Graham said that the likelihood of a Fed rate pause has largely already been factored into the market.
"The Fed is already expected to pause rates, so this week’s FOMC meeting is probably mostly priced in," he told The Block. "However subsequent to a pause, should the Fed lower interest rates more than is already anticipated this would absolutely be bullish for bitcoin prices."
Ryze Labs analysts added that institutional interest in bitcoin will continue to develop, with expectations for increased spot bitcoin ETF inflows as fund managers ramp up sales cycles and sales teams familiarize themselves with the new product.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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