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Bitcoin traded slightly higher on Wednesday, continuing its recent consolidation phase after surging to record highs earlier this month. The world’s largest cryptocurrency rose by 0.5%, reaching $118,582.7 as of 02:10 ET (06:10 GMT).
Bitcoin’s Rangebound Trading Amid Broader Market Sentiment
Bitcoin has been trading within a narrow range since hitting a record high above $123,000 last week. While recent developments, such as the U.S.-Japan trade agreement, provided a boost to risk assets, Bitcoin’s price has remained relatively subdued, reflecting caution among investors. The digital currency’s movement has been tempered by ongoing regulatory and macroeconomic developments, with market participants awaiting further clarity.
U.S.-Japan Trade Deal Boosts Risk Sentiment
U.S. President Donald Trump’s announcement of a significant trade agreement with Japan has helped lift global risk assets, with Bitcoin being no exception. The deal includes a reduction in tariffs on Japanese goods from 25% to 15%, alongside a massive $550 billion investment from Japan into the U.S. economy. Additionally, the agreement opens Japanese markets to U.S. exports, including automobiles, agricultural products, and energy goods.
This trade deal has sparked a “risk-on” mood in global markets, with broader assets such as equities and commodities seeing sharp gains. However, the increase in risk appetite was reflected in a pullback in gold prices, as investors shifted toward higher-risk, higher-return assets like Bitcoin.
Despite the positive sentiment surrounding the trade deal, Bitcoin has stayed within its recent trading range, reflecting the market’s cautious stance ahead of Trump’s August 1 tariff deadline. This uncertainty is keeping investors on edge as they wait for further developments in the ongoing trade discussions.
U.S. Crypto Regulation and Fed Meeting Drive Crypto Sentiment
Bitcoin and other cryptocurrencies are also finding support from the recent passage of key U.S. crypto regulation. President Trump signed the GENIUS Act into law, which sets a federal regulatory framework for stablecoins, offering greater clarity and legitimacy to the sector. In addition to this, the U.S. House of Representatives passed two other significant crypto bills that are now on their way to the Senate, signaling continued regulatory progress in the U.S. crypto landscape.
Investor focus is now turning toward the Federal Reserve’s policy meeting on July 30, where the central bank is expected to provide more guidance on future interest rate movements. The outcome of this meeting could have a significant impact on risk assets, including Bitcoin, as investors look for clues on the Fed’s stance amid ongoing economic uncertainties.
Altcoins Subdued, Dogecoin Falls
Most altcoins saw modest gains on Wednesday, in line with Bitcoin’s movement. Ethereum, the second-largest cryptocurrency, rose by 0.5% to $3,705.42, while XRP, the third-largest crypto, gained 0.5% to $3.48. Other altcoins, including Solana, Cardano, and Polygon, also posted minor gains.
However, meme tokens like Dogecoin saw a slight decline, falling 0.7%. The $TRUMP token, on the other hand, posted a 1.3% increase, benefiting from the overall positive sentiment surrounding the crypto sector.
Bitcoin’s price remains in a consolidation phase despite positive market sentiment driven by the U.S.-Japan trade deal and the recent passage of crypto regulation in the U.S. As investors await further clarity on trade negotiations and the Federal Reserve’s policy stance, Bitcoin and altcoins will likely continue to track developments in both the macroeconomic environment and the crypto regulatory landscape.
