Bitcoin staged a recovery, surpassing the $43,000 mark, amid speculation regarding a potential pause in interest rate adjustments by the U.S. Federal Reserve later this week. This marks the first time in two weeks that Bitcoin's price has exceeded $43,000, with the market buzzing about the upcoming Federal Open Market Committee meeting where a rate pause is expected.

There are signs suggesting a decline in outflows from Grayscale Investments' bitcoin ETF. ETF analyst, James Seyffart, suggested that one of the recently launched funds might eventually outpace the Grayscale Bitcoin Trust in trading volume.

On Tuesday, over $60 million worth of cryptocurrency short positions were liquidated, including over $40 million in leveraged Bitcoin positions within a 24-hour period, according to Coinglass data. Additionally, short liquidations contributed over $24 million leveraged in Bitcoin. As of 12:00 p.m. ET, the leading digital asset by market capitalization saw a 2% increase over the last 24 hours, trading at $43,201 according to data from The Block.

Ahead of the U.S. Federal Reserve's FOMC meeting this week, the market is expecting interest rates to remain unchanged. According to the CME FedWatch tool, there is a significant 97.9% probability that the Fed funds rate will stay within its current target range of 5.25–5.5%.

Bitcoin is viewed as a "risk-on" asset by Ryze Labs, indicating its potential to thrive in a strong bull market, particularly in the event of a rate pause followed by rate cuts. However, Mathew Graham, the Founder of Ryze Labs, noted that the market has already priced in the expectation of a rate pause by the Federal Reserve.

Nevertheless, if the Fed implements interest rate cuts beyond current expectations, it could signal a positive market shift for Bitcoin. The Ryze Labs team also predicts that institutional interest in Bitcoin will continue to grow over time, with an expected increase in inflows for the bitcoin ETF as fund managers extend sales cycles.