Bitcoin is trading flat as investors anticipate warmer US inflation data

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The US Bureau of Labor Statistics will release Consumer Price Index data today, which will influence any decision on interest rates. Photo: Getty

Bitcoin remained relatively flat for the second day in a row, hovering around $27,000 as investors remained cautious ahead of Wednesday’s upcoming US inflation report.

The world’s largest cryptocurrency by market capitalization (BTC-USD) has seen a slight drop of 0.2% in the last 24 hours, its value standing at around $27,561, at the time of writing.

Ether (ETH-USD), the second-largest cryptocurrency, saw a slight decline of around 0.1% in the past 24 hours, trading at around $1,840.

Read more: Philip Hammond warns of ‘real risk’ to London financial services from EU crypto bill

According to data from CryptoQuant, bitcoin reserves on all cryptocurrency exchanges rose on Wednesday, possibly indicating higher selling pressure,

The influx suggests that investors are transferring digital assets to exchanges and are ready to sell, should prices fall further.

Read more: Live crypto prices

Investors’ eyes will be on Wednesday’s release of Consumer Price Index (CPI) inflation data from the U.S. Bureau of Labor Statistics, which will influence the Federal Reserve’s next policy decisions. interest rate.

While annual CPI inflation in the US is expected to remain unchanged at 5% in April, core CPI, which excludes volatile food and energy prices, is expected to rise by 0, 3% month-on-month.

US CPI data will be of utmost importance to any future Federal Reserve interest rate decision.

After the last meeting of the Federal Open Market Committee (FOMC) on May 3, the US central bank made it clear that it would take a data-dependent approach to determining the size of further rate hikes amid elevated inflation levels. and strains on the banking sector persist. on point.

Read more: Bitcoin shows bullish signals after Janet Yellen warns the US could be “out of cash by early June”

Any increase in interest rates will have a ripple effect on bitcoin. The digital asset usually falls at the same rate as US stocks, and at the end of trading on Tuesday, the Dow Jones (^DJI) fell 0.25% to 33,534.66 points, while the S&P 500 (^ GSPC) fell 0.43% to 4,120.32 points. The tech-heavy NASDAQ (^IXIC) also fell 0.48% to 12,200.57.

The story continues

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