Bitcoin’s Sideways Shuffle: CPI Reading Holds Investors Captive
- Bitcoin moves sideways at mid-$27,000.
- Investors await the latest US inflation report on Wednesday.
- Ethereum and Bitcoin Cash have fluctuated during the day.
Bitcoin (BTC) remained relatively stable on Tuesday, trading at around mid-$27,000, while investors eagerly await the latest U.S. inflation report on Wednesday.
The macro backdrop has changed little in the past few weeks, but market watchers will be focusing on “Binance and whether people are seriously storing cryptos in cold wallets,” according to Edward Moya, senior market analyst for foreign exchange Oanda, in a Tuesday note.
As for Bitcoin, it appears to be stuck in a trading range, but if we have a de-risking moment on Wall Street, that will be enough to send cryptos toward the lows seen in mid-March, Moya wrote. Ethereum (ETH), the second-largest cryptocurrency, was off roughly 0.4% on Tuesday to change hands at around $1,844. Despite this, Bitcoin Cash (BCH) jumped over 9% for the day to trade at around $121.29, while Lido’s governance token (LDO) recently rose by 6% to $1.85.
As measured by the Market Index (CMI), the overall crypto market performance was up roughly half a percentage point for the day. However, equity markets turned mixed ahead of Wednesday’s Consumer Price Index (CPI) for April, with the S&P 500 and tech-heavy Nasdaq Composite closing down 0.4% and 0.6%, respectively. The Dow Jones Industrial Average (DJIA) slid 0.1%.
In bond markets, the note on the 2-year Treasury yield rose 2 basis points to sit around 4.02%, while the 10-year Treasury yield remained almost flat from Monday, same time, to reach 3.52%.
Investors across the board will be watching the CPI for clues about how the U.S. Federal Reserve will act at its next policy meeting in June. The Fed approved a 25 basis points (bps) increase earlier this month to push the Federal Funds rate to its highest level in 16 years. This development has sparked debate about how the economy will develop in the coming months, with some analysts predicting a strong rebound while others are more cautious. As such, there is a great deal of uncertainly at present, and investors are keeping a close eye on the latest developments to inform their decision-making.
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