On Wednesday, investors bought BitcoinBTCUSD +0.51% and other cryptocurrencies as they waited for important inflation data that could influence the next move in interest rates made by the Federal Reserve.
Bitcoin’s value, which is currently at $30,750, has increased by a fraction of one percent over the course of the past day. This is toward the upper end of a trading range that has been the norm for the past few weeks, which has been between $30,000 and $31,000. The largest digital asset just had its best first half of the year since 2019, but it has been flat lately and has not been able to get back to April’s high of $31,500. This is the best first half of the year it has had since 2019. Traders are holding out hope that, with the help of the appropriate catalyst, this will quickly change.
An analyst working for the broker FxPro Alex Kuptsikevich stated that “Bitcoin is getting stronger.” The price of Bitcoin has risen to $30,800 and is drawing ever closer to $31,400, which represents the upper boundary of its short-term trading range. Only a sustained move back above this level will indicate that the market is prepared for further gains, with possible targets in the neighborhood of $35,500 by the time the month is over. So, we can surely conclude that Bitcoin’s price is currently favorable and has the potential to rise further in the near future.
The next significant event will take place on Wednesday, when the United States consumer price index for June will be made public. There is an equal chance that this will affect Bitcoin as there is that it will affect the Dow Jones Industrial Average or the S&P 500. In a time when investors are uncertain about what the Federal Reserve will do next with regard to interest rates, investors are keeping a close eye on this important measure of inflation. Even though it is highly likely that there will be another rate hike in July, the most recent inflation number may make it clearer whether the Federal Reserve is done raising interest rates to combat inflation or whether there will be additional rate hikes in the future. In general, market participants are eagerly awaiting the release of this information because it may have significant repercussions for the movement of Bitcoin’s price as well as the broader financial landscape.
Because of the significant headwind that the Federal Reserve’s campaign of rate hikes that began in March 2022—the most aggressive tightening cycle in a generation—was for risky assets such as stocks and cryptocurrencies, the outlook for inflation and rates continues to be important.
According to Antoni Trenchev, co-founder and managing partner of the cryptocurrency lending platform Nexo, “We probably need more proof that core inflation is going down before Bitcoin can really take off.” “Investors will be hoping that Bitcoin’s price rises like it did after the inflation report on June 13, when it went from below $26,000 to $31,500, which was a 13-month high.” As a result, investors are keeping their fingers crossed that the past might be repeated, with Bitcoin’s price possibly increasing significantly after the release of the forthcoming inflation report.
The value of the second-largest cryptocurrency, Ether ETHUSD +0.72%, increased by 1% to reach $1,890. Altcoins and cryptocurrencies with a lower market cap, such as Cardano and Polygon, did not move as much. The change in either direction was less than one percent. The performance of memecoins was roughly equivalent, with Dogecoin DOGEUSD +0.58% trading just above flat and Shiba Inu losing less than 1% of its value.