Bitcoin and XRP are showing signs of recovery as expectations of a shift in US monetary policy boost interest in risk assets.
However, the rally for both crypto assets faces risks due to high US Treasury bond yields and uncertainty regarding the Federal Reserve's (Fed) interest rate trajectory.
Future price movements will depend on the strength of buying demand as well as developments in the US economy and monetary policy.
Bitcoin Faces $90,000 Resistance
Bitcoin is supported by expectations of improved market liquidity, institutional buying, and inflows into spot exchange-traded funds (ETFs).
At the time of writing, Bitcoin was trading at $6,876, up 0.42% since the opening of the Asian session on Monday.
The US Treasury's plan to increase the maximum size of long-term bond buyback operations is also drawing attention, as the move could influence market liquidity conditions.
Additionally, Michael Saylor, Executive Chairman of Strategy, hinted at the possibility of further Bitcoin purchases. The company previously reported acquiring 950 BTC, thereby increasing its institutional holdings.
However, the $90,000 level remains a key resistance point.
A decisive breakout above this level could pave the way for a rise toward $100,000, whereas a failure to break through might cause Bitcoin to trade sideways or face selling pressure.
Market Liquidity and Crypto Policy Act as Catalysts for Bitcoin
Bitcoin sentiment is also influenced by President Donald Trump's push for Congress to pass the CLARITY Act, which aims to clarify digital asset regulations.
However, uncertainty regarding the legislation's approval could still limit investor confidence. Tether is also reportedly planning to bring USDT back to the Bitcoin network using RGB technology, potentially expanding its utility for transactions and payments.
At the same time, inflows into spot Bitcoin ETFs could support prices through institutional demand, although global economic pressures still pose a risk of limiting gains.
XRP Recovers to US$1.50; Institutional Demand in Focus
XRP rose approximately 1.2% to US$1.50 following weak US employment data, which showed only 29,000 new jobs added compared to the expected 90,000.
At the time of writing, XRP was trading at US$1.5288, up 0.56% since the opening of the Asian session on Monday.
This development has eased concerns regarding Federal Reserve interest rate hikes and bolstered crypto market sentiment.
However, US 10-year bond yields exceeding 5.36% could still cap XRP's gains.
Investors are also monitoring the XRP Ledger update, BatchV1_1—scheduled for October 9—as a potential catalyst for market sentiment.
Inflation Data and Fed Minutes in Focus
Crypto investors will continue to monitor US economic developments for clues regarding the direction of interest rates.
The Federal Reserve meeting minutes, due on October 7, are expected to provide further insight into differing views among policymakers regarding inflation risks and the cooling labor market.
US Consumer Price Index (CPI) data for September is scheduled for release on October 14.
If inflation data indicates easing price pressures, expectations for less restrictive monetary policy could support Bitcoin and XRP.
Conversely, persistently high inflation or rising bond yields could put downward pressure on both assets. Bitcoin still has the potential to extend its recovery if institutional demand and ETF inflows remain strong.
However, the US$90,000 level serves as a key resistance that must be breached to solidify bullish momentum.
Failure to break through this level could lead to continued price consolidation or renewed selling pressure.
XRP has the potential to sustain its recovery if the price holds around US$1.50 and crypto market sentiment continues to improve.
However, high US bond yields and uncertainty regarding Federal Reserve policy remain risks.
Future price action depends on buying strength and XRP's ability to maintain momentum above current levels.
