Investing.com — Bitcoin prices rose on Wednesday, extending a rally from more than five-month lows as bargain buyers stepped in and sentiment improved slightly, though the token's rally appeared to be losing steam.
This trend was also reflected in broader cryptocurrency prices, where gains slowed from the previous session as the factors behind Monday's decline — concerns about a U.S. recession, interest rate hikes in Japan and tensions in the Middle East — continued to weigh on sentiment.
At 01:26 ET (05:26 GMT), the token was up 1.9% at $56,952.4. On Monday, the token had fallen to $49,000 before recovering from those levels.
Bitcoin recovery slows down, more positive signs are expected
Gains for the world's largest cryptocurrency slowed after it rebounded nearly 4% on Tuesday.
The token was still trading below levels seen before Monday's drop as crypto markets also struggled with the prospect of a sell-off by the US government, as well as waning interest in the cryptocurrency derivatives market.
Risk-averse sentiment has seen cryptocurrency derivatives, primarily exchange-traded funds, register strong outflows over the past week.
Optimism about an improved regulatory environment in the United States also waned as the 2024 presidential race heated up. Democratic candidate Kamala Harris was seen catching up with Republican nominee and pro-cryptocurrency candidate Donald Trump, a Bloomberg survey showed last week.
IMF notes progress in El Salvador negotiations, but Bitcoin is a sticking point
The International Monetary Fund said on Tuesday it had made progress in talks with El Salvador over a financing program for the Central American country, but its adoption of Bitcoin still remains a point of contention, a Reuters report showed.
The IMF and El Salvador appear to have reached “preliminary understandings” to improve the country’s economy and have discussed policies that could be supported by the IMF.
But the fund noted that while several of the projected risks of Bitcoin adoption in the country have yet to materialize, negotiations with El Salvador will be geared toward mitigating those risks.
El Salvador adopted Bitcoin as legal tender in 2021 and had outlined extensive plans to build infrastructure around the cryptocurrency. But these plans failed to materialize, as the country saw little improvement in its fiscal woes and also found few takers for its planned “Bitcoin bonds” to fund the projects.
Cryptocurrency Price Today: Altcoins Move Mixed as Rally Slows
Cryptocurrency prices were generally mixed on Wednesday as the broader recovery in the sector lost momentum.
The world's No. 2 token fell 0.7% to $2,504.90, while Bitcoin lost 0.4%.
and rose by 1.3% and 7.2%, respectively.
Among meme tokens, it fell 0.9%, while it lost 1.4%.
