Bitcoin falls below USD $67,000 prior to the announcement of interest rates and inflation report in the US – DiarioBitcoin
By Hannah Perez
Bitcoin retreated to multi-week lows amid estimates of persistent inflation and reduced expectations of an immediate US interest rate cut.
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- The prospects of two news items of macroeconomic interest impact the price of Bitcoin
- Bitcoin fell to June lows a day before US inflation report and FED meeting
- Investors Await U.S. Interest Rate Cut Announcement
- However, estimates of persistent inflation diminish hopes of a cut
The cryptocurrency market marked a striking price reversal this Tuesday, with Bitcoin retreating from USD $67,000 in anticipation of two news of macroeconomic importance in the United States.
Bitcoin (BTC), the leading digital currency by market capitalization, is revisiting multi-week lows after losing more than 4% in the last 24 hours. The data from CoinMarketCap show that BTC slid this Tuesday to around USD $66,100 at midday (EDT), its lowest price since mid-May.
The fall occurs after having momentarily touched a price of USD $70,000 the previous day and a relatively bullish start to the month, in which Bitcoin It remained for several days around the key area of USD $70,000. The rise coincided with an acceleration in inflows to cash exchange-traded funds (ETFs). Bitcoin cash in the US
Bitcoin It reached an all-time high price above $73,500 in March amid enthusiasm for new US ETFs and other bullish factors, but has not regained the mark since.
The rest of the digital asset market behaved in a similar way this Tuesday, extending losses by almost 6% for global capitalization. Main cryptocurrencies like Solarium (SOL), BNB and Ethereum (ETH), saw deeper percentage drops compared to its predecessor of 8%, 7%, and 6%, respectively.
FED meeting and inflation report in the US
The reversal in the cryptocurrency market comes at a time when investors’ attention is focused on upcoming announcements on monetary policy in the United States and the inflation report.
The US Federal Reserve (FED) is expected to deliver an interest rate decision tomorrow, a development that could bring implications to both traditional and cryptocurrency markets. While market participants expect rates to remain unchanged, according to the tool CME FedWatchthe announcement of a potential cut schedule or even the slightest signal of officials’ intention to lower rates could be enough to generate relief in the markets.
The FED has kept benchmark rates unchanged in recent months after raising them to multi-year highs, a range of 5.25% – 5.50%, in mid-2023 as part of an effort to calm the inflation.
Investors have been hoping for an easing of monetary policy even though central bank officials have been reluctant to lower rates as long as inflation remains above its 2% target. Expectations of a cut were raised last week, when the European Central Bank announced a first cut since 2019.
The interest rate decision is closely linked to the inflation report, which coincidentally is also expected tomorrow. US Consumer Price Index (CPI) data for May will be released on Wednesday and analysts expect the reading to show results of persistent inflation in the country.
If so, it seems unlikely that the FED will be ready to announce a rate cut, a prospect that currently appears to negatively impact digital currency prices.
Immediate Bearish Outlook
The latest price drop Bitcoin coincides with a break in the streak of inflows for ETFs Bitcoin spot in the US, which on Monday saw outflows of $65 million following a record 18 straight sessions of net capital inflows.
Despite the immediate prospect of depressed prices, many analysts agree that Bitcoin could conquer new, unprecedented price heights in the coming months before the close of 2024. Several are targeting $100,000 as a price target, and some have even predicted higher prices.
Article by Hannah Estefanía Pérez / DailyBitcoin
Picture of Unsplash
WARNING: This is an informative article. DiarioBitcoin is a media outlet, it does not promote, endorse or recommend any particular investment. It is worth noting that investments in cryptoassets are not regulated in some countries. They may not be suitable for retail investors as the entire amount invested could be lost. Check the laws of your country before investing.
