Bitcoin‘s price saw marginal gains on Tuesday, remaining firmly entrenched within a trading range established over the past two months, with attention centered on U.S. inflation figures for further insights into interest rate movements.
Despite a resurgence in capital inflows into cryptocurrency investment products, the impact on price action remained subdued, even as these products experienced their first inflows in five weeks.
Over the past 24 hours, Bitcoin recorded a 2.5% uptick, reaching $62,498.6 by 01:05 ET (05:05 GMT).
Bitcoin Treads Water, Crypto Capital Flows Improve:
The cryptocurrency market’s flagship asset received limited support from reports indicating that crypto investment products, particularly spot Bitcoin exchange-traded funds, witnessed their initial weekly capital inflows in five weeks.
Data from CoinShares revealed that crypto products observed inflows amounting to $130 million in the week ending May 12, with a significant portion directed towards the U.S. The introduction of spot Bitcoin ETFs in Hong Kong further spurred some inflows.
However, despite the uptick in capital flows, overall trading volumes in crypto investment products remained subdued, lingering well below the highs witnessed in March during Bitcoin’s peak.
Bitcoin has largely consolidated within a narrow trading range of $60,000 to $70,000 over the past two months, influenced by a blend of concerns over interest rates, regulatory ambiguities, and diminishing enthusiasm surrounding ETFs, with the highly anticipated halving event failing to make a substantial impact.
Altcoins Show Progress Amid Inflation Concerns:
In tandem with Bitcoin’s modest gains, broader crypto markets witnessed an upward trend on Tuesday. Ethereum, the second-largest token globally, surged 1.8% to reach $2,936.00, while Solana and XRP recorded increases of 6.5% and 3%, respectively.
Meme coins registered notable gains, mirroring an overnight surge in meme stocks such as GameStop Corp (NYSE: GME) and AMC Entertainment Holdings Inc (NYSE: AMC) on Wall Street. Dogecoin witnessed an almost 10% rise, while newer meme coin PEPE surged over 20%.
However, overall crypto prices remained subdued, with investors exercising caution ahead of crucial U.S. inflation data releases scheduled for later in the week.
Anticipation Builds for U.S. Inflation Data:
Market participants are eagerly awaiting the release of producer price index inflation data later on Tuesday, followed by the more closely-watched consumer price index inflation data on Wednesday.
Both readings are expected to play a crucial role in shaping the outlook for U.S. interest rates, amidst ongoing concerns regarding prolonged high rates.
The prospect of elevated U.S. interest rates presents a challenging scenario for crypto markets, which typically thrive in low-rate, high-liquidity environments.
