Bitcoin Stalls Over Long Weekend. How the Fed Could Shake Up Cryptos This Week.

 

BitcoinBTCUSD –0.23%  and other cryptocurrencies were little changed on Monday amid a quiet day for global trading, with U.S. markets closed for the Juneteenth holiday.

However, a macro catalyst lies in the days ahead as cryptos continue to stagnate in a familiar range.

The price of Bitcoin has fallen less than 1% over the past 24 hours to $26,400, losing ground from a weekend peak near $27,000. A rally last Friday—after money manager BlackRock (BLK) filed to create a Bitcoin exchange-traded fund—carried the largest digital asset back up above $26,000. Bitcoin is now back in the trading range from $26,000 to $27,000 that has dominated for much of the period since the token hit a 10-month high in April above $30,000—a level that has since proved hard to reclaim.

Federal Reserve chairman Jerome Powell is set to testify before Congress this week, speaking before the House Financial Services Committee and Senate Banking Committee on Wednesday and Thursday, respectively. Powell’s remarks have the possibility to be the next major catalyst for cryptos, prices of which have risen and fallen in response to the outlook for U.S. monetary policy.

The Fed’s campaign of interest-rate hikes over the past year was a key force driving down digital assets from their late 2021 peak, and Bitcoin’s rally of some two-thirds in 2023 has come amid expectations that the central bank’s work is almost finished. Last week the Fed hit the pause button on rates for the first time in this tightening cycle, but signaled that more rate increases could be ahead.

How hawkish Powell is before Congress—how much the Fed chief telegraphs more rate-hikes—will be a focus for investors across markets this week, crucial for cryptos just like the Dow Jones Industrial AverageDJIA –0.32%  and S&P 500SPX –0.37% .

Beyond Bitcoin, EtherETHUSD –0.37%  —the second-largest crypto—lost less than 1% to $1,725. Smaller cryptos, or altcoins, were weaker, with Cardano dropping 3% and Polygon slipping 2%. Memecoins were more mixed, with DogecoinDOGEUSD +0.25%  down less than 1% and Shiba Inu up less than 1%.