Bitcoin and other cryptocurrencies experienced an upward trend on Wednesday, as investors eagerly anticipated the release of crucial inflation data that could potentially impact the Federal Reserve’s future decisions regarding interest rates.
The price of Bitcoin has shown a modest increase of less than 1% within the past 24 hours, reaching $30,750. This places it at the higher end of a trading range spanning between $30,000 and $31,000, which has persisted for several weeks now. Notably, Bitcoin has achieved its strongest performance for the first six months of a year since 2019. However, its recent progress seems to have stalled, unable to regain the height it reached in April at $31,500. Optimistic traders, however, remain hopeful that a catalyst for change is on the horizon.
According to Alex Kuptsikevich, an analyst at broker FxPro, Bitcoin is currently gaining momentum. Its value stands at $30,800 and is inching closer to the upper limit of its short-term range at $31,400. Only a breakthrough above this level will signify that the market is poised for further growth, with potential targets nearing $35,500 by the end of the month.
The Importance of the U.S. Consumer-Price Index for Bitcoin
The U.S. consumer-price index for June is set to be released on Wednesday, and it could have a significant impact on Bitcoin, as well as the Dow Jones Industrial Average and S&P 500. This particular measure of inflation holds great importance for investors, who are closely monitoring the Federal Reserve’s next moves on interest rates. With a rate hike expected in July, the latest inflation data will help determine whether the Fed will continue its battle against inflation by raising rates further or if it believes its work is done.
The Federal Reserve’s aggressive campaign of rate hikes, which began in March 2022, has had a major impact on risk-sensitive assets like stocks and cryptocurrencies. Consequently, the outlook for inflation and interest rates remains a crucial factor for these investments.
Antoni Trenchev, co-founder and managing partner at crypto lender Nexo, believes that Bitcoin’s price could experience a significant boost once there is concrete evidence of a downward movement in core inflation. Trenchev points to the June 13 inflation report as an example, when Bitcoin’s price initially dropped below $26,000 but later surged to a 13-month high of $31,500.
In summary, the forthcoming release of the U.S. consumer-price index for June has the potential to influence Bitcoin and other financial markets. Investors are eagerly awaiting this data to gain insights into the Federal Reserve’s future actions on interest rates and its ongoing battle against inflation.
Crypto Market Update
Beyond Bitcoin, Ether — the second-largest cryptocurrency — rose 1% to $1,890. However, the performance of smaller cryptocurrencies or altcoins remained more subdued. Cardano experienced a marginal increase of less than 1%, while Polygon slipped less than 1%.
Similar patterns were observed in the memecoin sector, as Dogecoin continued to trade just above flat, and Shiba Inu also shed less than 1%.
Stay informed with the latest developments in the world of cryptocurrency.