Cryptocurrency prices rose broadly on Monday, with bitcoin climbing above $27,000 for the first time this month.
Smart contracts platforms Solana and Cardano rose 5% and 2%, respectively, while Binance Coin added 1.5%. Payments token XRP gained about 1.5%. DeFi tokens tied to the Polkadot and Polygon networks increased about 2% each.
The reason for the move isn’t clear, although there was a spike in trading volume during opening hours in the Asian market, said Dessislava Aubert, senior research analyst at crypto data provider Kaiko.
“In the current low liquidity environment, relatively low buying and selling pressure could amplify spot price movements and spur liquidations on derivatives markets,” she said.
The volume spike followed a report by Japan’s Nikkei over the weekend that the Japanese government plans to allow startups to sell digital tokens to venture capital funds in addition to conventional assets like shares and stock options.
“Overall, we expect volatility this week ahead of several big central bank meetings,” Aubert added.
The moves coincide with a rising stock market ahead of the Federal Reserve’s two-day policy meeting, which is scheduled to conclude this Wednesday. Traders are assigning a 99% chance that the Fed keeps interest rates as they are and just a 31% probability of a hike in November, according to the CME Group’s FedWatch tool, which gauges pricing in the fed funds futures market.
Bitcoin is coming off its first back-to-back weekly gains since May despite bearish sentiment among investors. Its 50-day moving average began turning lower in August and recently crossed below its 200-day moving average. While crypto traders are usually unfazed by short-term volatility, the trend has caused some to worry that long-term momentum may be breaking.
Monday’s moves bring bitcoin’s monthly gain to 4%.