Bitcoin and Cryptocurrencies Look to Break Stagnant Range

Bitcoin and other cryptocurrencies made gains on Monday as traders sought to break out of a stagnant range that has persisted for the past month. The coming days are poised to hold a macroeconomic catalyst that could potentially shift the trajectory.

Bitcoin's price rose 1% over the last 24 hours, surpassing $26,750. This move takes it further away from the $26,000 level, which has been its trading range since mid-August. Traders would consider it a psychological victory if Bitcoin manages to cross the $27,000 mark. Currently, the largest digital asset is suffering from historically low volatility and trading volumes, indicating a decline in interest within the crypto sphere in recent months.

Similar to how the stock market reacts to the Dow Jones Industrial Average and S&P 500, crypto prices are likely to be influenced by the upcoming Federal Reserve decision. It is widely anticipated that the Fed will maintain interest rates when it announces its decision on Wednesday. Investors will closely analyze the central bank's language to gauge whether a rate hike in November is probable.

Last year, borrowing costs reached their highest levels in generations as the Fed took steps to rein in inflation. This exerted significant pressure on both cryptocurrencies and stocks. Higher returns on risk-free cash tend to decrease demand for riskier investments such as Bitcoin. However, indications that the central bank may halt its rate hikes and potentially lower rates next year could boost recent gains for Bitcoin. It could serve as the catalyst needed to revitalize the crypto market.

Apart from Bitcoin, Ether, which is the second-largest cryptocurrency, experienced a marginal increase of less than 1% to $1,630. Altcoins, or smaller tokens, had minimal movement, with Cardano and Polygon trading relatively flat. There was mixed performance among memecoins, with Dogecoin declining nearly 1% and Shiba Inu dropping less than 1%.