Bitcoin trades flat as investors anticipate more hot inflation data from the US
Bitcoin has remained relatively stable for the second day in a row, parked in the mid-$27,000 range as investors remain cautious ahead of the upcoming US inflation report on Wednesday.
The world’s largest cryptocurrency by market capitalization (BTC-USD) saw a slight decrease of 0.2% in the last 24 hours, with a value of approximately $27,561, at the time of writing.
Ether (ETH-USD), the second largest cryptocurrency, experienced a slight decline of around 0.1% in the last 24 hours, trading at approximately $1,840.
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According to data from CryptoQuant, bitcoin reserves increased across all cryptocurrency exchanges on Wednesday, possibly indicating higher selling pressure,
The approach suggests that investors are moving digital assets to exchanges and are ready to sell, in the event of further downward price movements.
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Investor eyes will be on Wednesday’s release of Consumer Price Index (CPI) inflation data from the US Bureau of Labor Statistics, which will influence upcoming interest rate decisions by the Federal Reserve.
While US annual CPI inflation is forecast to remain unchanged at 5% in April, core CPI, which excludes volatile food and energy prices, is expected to rise 0.3% month-on-month.
The US CPI data will have the greatest relevance to any future Federal Reserve decision on interest rates.
After the last meeting of the Federal Open Market Committee (FOMC) on May 3, the US central bank made it clear that “it will take a data-dependent approach to determine the scope of further interest rate increases” as elevated inflation levels and banking sector stress remain in focus.
Read more: Bitcoin Shows Bullish Signals After Janet Yellen Warns US May Be ‘Out Of Money By Early June’
Any increase in interest rates will have a knock-on effect on bitcoin. The digital asset typically falls in lockstep with U.S. stocks, and at the close of trade Tuesday, the Dow Jones (^DJI) was down 0.25% at 33,534.66, while the S&P 500 (^GSPC) was down 0.43% at 4,120 .32 points. The tech-heavy NASDAQ ( ^IXIC ) also fell 0.48% to 12,200.57.
See: Belgium’s digital minister: EU plans to ‘bring order to crypto’ and create its own blockchain | Crypto Mile
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