Bitcoin’s (BTC) price took breathing after being pressured for the past week on slight optimism around the US CPI data and Fed rate decision. The price of the cryptocurrency is currently up 0.5%, standing at $67,689.17, according to CoinMarketCap data. However, the entire investor’s attention now vests on the future and how the BTC price will fair in the coming week.
US Inflation Below Expectations, Fed Keeps Rates Unchanged
In May 2024, the US annual inflation rate dropped to 3.3% from 3.4% in April and the predicted 3.4%. The CPI was flat from the previous month and was below estimates of a 0.1% increase. This was because rising housing expenses offset falling gas prices. The good news is that the CPI data came in as a booster for many markets, indicating that the Fed’s view of bringing inflation down could be working.
US CPI statistics hold a crucial position in the global investment landscape, serving as a barometer of the economy’s health. Despite a significant drop in US inflation from a peak of 9.1% in June 2022 to 3.4% in April 2024, the US central bank remains concerned about the persistence of inflation.
Over the past six to eight months, the US CPI has maintained an average of 3.2%. The US Federal Reserve has been clear that no rate reduction will be considered until the nation’s CPI falls to 2%. While annual inflation rose by 3.4% in April, the US CPI increased by 0.3 percent each month, a figure lower than the 3.5 percent increase for the 12 months ending in March.
On the other hand, the US Federal Reserve kept its key interest rates unchanged at its June meeting. However, the Fed’s prediction of only one rate cut this year came in as bad news. This is lower than the previous prediction of three rate cuts in 2024. Despite all that, markets worldwide saw a sense of boost thinking about the upcoming rate cut.
Will BTC Price Rise This Week?
In the past, investors have placed a great deal of weight on the Federal Reserve’s rate decisions and inflation numbers when assessing assets. Government securities usually lose value when interest rates are lower, which makes virtual assets like Bitcoin more appealing.
The recent announcement of rate cuts by the Fed, coupled with the potential delay in rate reduction, has significantly contributed to the current market volatility for cryptocurrencies. In response, investors might opt to retain their traditional assets temporarily.
Notwithstanding these developments, a robust economy sustains a high demand for investments. Wealthy economies often show a preference for riskier commercial ventures. Given this backdrop, it seems unlikely that the Fed’s decision will impede the cryptocurrency market’s expansion rate.
The bitcoin (BTC) price may first decline before rising in light of current market situations. The cost of Bitcoin has dropped 4.8% over the past seven days as resistance is found at the weekly close, currently at $71,280. It is currently trading close to the $67,147 weekly support level. The US CPI news is likely to trigger volatility in the price of Bitcoin.
However, the market will likely stabilize soon, looking for better cues to surge in the coming days.
