Investing.com– Bitcoin rose on Tuesday, rebounding further from recent losses as increasing conviction in a December interest rate cut by the U.S. Federal Reserve helped support risk assets.
But gains in Bitcoin were seen running out of steam, as investors still remained largely cautious towards crypto after major price losses in October and early-November.
Altcoins clocked stronger gains on Tuesday, but were also nursing steep losses over the past month.
Bitcoin rose 0.8% to $88,187.9 by 00:43 ET (05:43 GMT).
Bitcoin aided by Dec rate cut bets
Bitcoin’s recovery from a seven-month low was spurred chiefly by a resurgence in bets on a December interest rate cut by the Fed. This came as at least two Fed officials spoke in support of cutting rates next month.
Markets are pricing in a 77.2% chance the Fed will cut rates by 25 basis points during its December 9-10 meeting, up sharply from a 41.8% chance seen last week, CME Fedwatch showed.
The reversal in market expectations sparked gains across risk-driven markets, with crypto also being caught up in the recovery rally.
But overall gains in crypto lagged the recovery seen in stocks, especially in the technology sector. While crypto tends to move in tandem with tech stocks, it has steadily decoupled from the sector since at least early-October.
Bitcoin and broader crypto prices have been on an extended downturn since October, hurt by a slew of factors. Retail traders were seen growing wary of the sector after a flash crash in early-October, while institutional flows into crypto also largely dried up, with U.S.-listed Bitcoin exchange traded funds logging five straight weeks of capital outflows.
Focus is now on a host of upcoming U.S. economic readings for more cues going into the Fed’s December meeting. Producer inflation and retail sales prints for September are due later on Tuesday, while PCE price index data, the Fed’s preferred inflation gauge, is due on Thursday.
Crypto price today: altcoins clock stronger recovery
Broader crypto prices fared slightly better than Bitcoin on Tuesday, as the battered sector drew in bargain buying.
World no.2 crypto Ether rose 3.2% to $2,928.08, while XRP jumped 8.7% to $2.2523.
Solana, Cardano, and BNB rose between 1% and 5%.
Among meme tokens, Dogecoin rose 3.1%, while $TRUMP fell 0.5%.
