Crypto Traders Watch Inflation Data to Get Bitcoin Rally Back on Track

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Bitcoin and other cryptocurrencies edged higher on Monday, remaining at some of the highest levels for digital assets since last summer, as traders eye inflation data in the coming days as possible catalysts for the next step up.

Bitcoin price rose 1.5% in the past 24 hours to $28,325. The biggest digital asset has been hovering around $28,000 for weeks, reaching as high as nearly $29,500 amid bouts of enthusiasm representing the highest point since the crypto crash accelerated in a market sharp bearish last June. Up around 70% so far this year, Bitcoin’s rally has sparked calls for a new crypto bull market.

Bitcoin failed to pick a direction after US jobs reported mixed results last Friday, said Yuya Hasegawa, an analyst at crypto exchange Bitbank. The US CPI for March, which will be released next Wednesday, could be a catalyst for Bitcoin to test and break above its $28,800-$29,000 resistance zone over the past three weeks.

Indeed, Bitcoin remains very sensitive to the macroeconomic context and remains correlated to the stock market, moving in step with the Dow Jones Industrial Average and the S&P 500 as a leading indicator of risk sentiment. Much of the attention has been on U.S. economic data that could inform the Federal Reserve’s next interest rate decision, although last Friday’s jobs report did little to move. the needle.

Aggressive monetary policy and a series of interest rate hikes by the Fed over the past year, an attempt to rein in decades-high inflation, have been a critical headwind for oil prices. crypto and equities, dampening demand for riskier assets. Much of Bitcoin’s rally since the start of 2023 has come as the Fed was expected to become more dovish soon, including perhaps taking its first break in this rate hike cycle when its policy-making committee will meet May 2-3.

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Ahead of the Fed’s next move in May, inflation data due this week weighs heavily. March’s Consumer Price Index (CPI), a leading indicator of inflation, will be released on Wednesday while Thursday will usher in last month’s Producer Price Index (PPI).

Traders expect these data points, whether boosting expectations of May rates holding steady or solidifying bets of another rate hike, could help pull Bitcoin out of its recent pattern. maintenance.

Bitcoin has been consolidating sideways, around $28,000, for three weeks now, said Alex Kuptsikevich, an analyst at brokerage FxPro. On a daily scale, the range has tightened since the beginning of the month, forming a bullish triangle. The price is believed to continue trending towards the breakout, with a rise above $29,000 paving the way for $35,000, while a break below $27,500 could pave the way for $25,500. .

Beyond Bitcoin, Ether, the second largest crypto advanced 1% to $1,860. Smaller cryptos or altcoins were more muted, with Cardano and Polygon each up less than 1%. It was more or less the same for memecoins, with Dogecoin up 2% and Shiba Inu

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earning less than 1%.

Write to Jack Denton at [email protected]

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