Bitcoin Price Booths. Inflation data could be the next catalyst for crypto traders.

The price of Bitcoin has risen less than 1% over the past 24 hours to $27,850, after trading between $27,500 and $28,000 for much of the weekend. The biggest crypto remains shy of a recent peak near $29,000 — the highest since the crypto crash accelerated last summer — and traders still see the $30,000 level as key after a rally that has lifted Bitcoin from around $16,500 since the start of the year.

“We believe that the upward momentum we have experienced in recent weeks is losing some of its charm as the price has started to consolidate ahead of an important psychological price level of $30,000,” said Naeem Aslam, chief investment officer at Zaye Capital Markets. “We need to see Bitcoin break very comfortably above this price and hold above this price mark if the rally is to continue its journey.”

Lack of liquidity in the crypto markets – a trend started by the meltdown of FTX in November and exacerbated by the failure of two crypto-focused banks in recent weeks – has ushered in volatile trading on weekends, when volume is lowest. While Bitcoin has seen choppy action since Friday, it has largely remained around the $28,000 zone, which it reached less than two weeks ago.

Cryptos have surged ahead over the past month despite growing regulatory headwinds, with digital asset companies like Coinbase Global (ticker: COIN) facing threats of a U.S. crackdown. Developments on the legal front may be a catalyst in the short term, but cryptocurrencies are likely to continue to be most sensitive to macroeconomic forces.

Expectations that the Federal Reserve will move to more accommodative monetary policy, easing rate hikes in the fight against inflation, have been the driving force behind the recent crypto rally. Bitcoin has moved in step with stocks as a leading gauge of risk sentiment, and is likely to continue to react along with

Dow Jones Industrial Average

and

S&P 500

to economic data and central bank news.

Crypto traders may have to wait until Friday for a big move, with limited major financial data until the end of the week. The personal consumption expenditures (PCE) index, which is the Fed’s preferred measure of inflation, will be released on Friday.

Beyond Bitcoin,

Ether

— the second-largest crypto commodity — fell 1% to $1,750. Smaller cryptos or altcoins were also weaker, too

Cardano

and

Polygon

lose 2% each. Memecoins were also in the red, with

Dogecoin

down 2% and

Shiba Inu

reduction 1%.

Write to Jack Denton at [email protected]