Bitcoin price today: rises to $61k amid rate cut hopes, CPI awaited

Investing.com-- Bitcoin price rose on Wednesday, extending an overnight rebound as risk sentiment improved amid increasing bets on a deeper U.S. interest rate cut, with focus turning to upcoming inflation data.

The Bitcoin rose 3% to $61,024.7 by 01:19 ET (05:19 GMT), having now recouped all of its steep losses logged during a market rout last week.

But 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. 

Bitcoin extends rebound as soft PPI data buoys sentiment 

Gains in Bitcoin and broader crypto markets were driven chiefly by softer-than-expected producer price index inflation data on Tuesday. 

The reading ramped up hopes that consumer price index data, due on Wednesday, will ease as expected. Softer inflation gives the Federal Reserve more headroom to begin cutting interest rates.

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, given that they increase liquidity that can be directed towards speculative markets, such as crypto.

But despite this week’s rebound, Bitcoin still remained close to a trading range seen for most of this year, as it struggled to make new highs after a rally in March. The token has also largely lagged a rally in stock markets in recent sessions.

Underperformance in crypto came amid renewed regulatory uncertainty over the U.S., as polls showed a close presidential race between Donald Trump and Kamala Harris. Trump has maintained a pro-crypto stance, while Harris has not addressed the industry. 

Mt Gox distributions continue

Also stemming Bitcoin’s recovery were reports that a wallet that had received $2 billion in Bitcoin from defunct crypto exchange Mt Gox had initiated a test transaction on Tuesday. 

It is unclear just how much Bitcoin the exchange holds. But the exchange is expected to increase selling pressure on Bitcoin as it returns tokens stolen from clients during a 2014 hack.

Crypto price today: Altcoin gains tepid 

Broader cryptocurrency prices rose tracking strength in Bitcoin. But gains across most major altcoins were limited.

World no.2 token Ether rose 2.6% to $2,720.45, while XRP and ADA rose 1.8% and 0.6%, respectively. SOL fell 1%.

Among meme tokens, DOGE rose 0.4%.