Bitcoin has climbed back above $80,000. Dovish remarks from a U.S. Federal Reserve official eased concerns about a September rate increase, pulling down U.S. Treasury yields that had spiked recently and reviving appetite for risk assets.
Bitcoin traded at $81,148.68 as of 8:07 a.m. on the 4th, up 5.38% from a day earlier, according to CoinMarketCap, a global cryptocurrency data site. At the same time, Ethereum rose 4.93% to $2,496.40, BNB gained 5.50% to $723.64 and XRP climbed 8.17% to $1.45.
The domestic market was mixed. On Bithumb at the same time, bitcoin was up 0.27% at 110.764 million won. Ethereum fell 0.23% to 3.407 million won and XRP slipped 0.05% to 1,988 won.
Behind bitcoin's surge was a retreat in worries about higher U.S. interest rates. Fed Governor Christopher Waller said he would be willing to support holding the policy rate steady if upcoming price data confirmed easing inflation pressure. The probability of a September rate increase priced into futures markets, as tracked by the CME FedWatch tool, fell to around 50% from 63.2% the previous day.
U.S. Treasury yields and the dollar also declined. The 10-year Treasury yield fell 3 basis points, or 0.03 percentage points, to 4.761%, while the two-year yield, which is sensitive to monetary policy, dropped 5 basis points to 4.332%. The dollar index slid about 0.5%. The weaker yields and dollar restored investor appetite for bitcoin and other risk assets. On Wall Street, the Dow Jones Industrial Average, the Standard & Poor's 500 and the Nasdaq composite all rose more than 1%.
With bitcoin back above $80,000, expectations are growing that it may be emerging from its recent correction. The cryptocurrency surged about 25% last month before sliding to the $76,000-$77,000 range on rising oil prices and concerns about the Fed's hawkish stance. Waller's comments, however, triggered a rebound of more than 5% in a single day, lifting it back over the $80,000 mark.
Some analysts caution that September's seasonal weakness and the possibility of a further correction still warrant attention. Bitcoin has posted negative returns in September in nine of the past 15 years. Others note that it has broken out of that seasonal pattern over the past three years, making it difficult to draw firm conclusions from historical data alone.
Market participants are turning their attention to the U.S. employment report due later in the day. If the jobs data comes in strong enough to avoid stoking recession fears but not so strong as to revive rate worries, it could further ease concerns about a rate increase and support gains in bitcoin and other risk assets.
The Fear and Greed Index compiled by crypto data firm Alternative.me rose 2 points from the previous day to 65, putting it in "greed" territory. A reading closer to zero indicates weak investor sentiment, while one closer to 100 signals an overheated market.
