Bitcoin saw a resurgence on Monday, propelled by investor anticipation surrounding forthcoming United States inflation figures for April, poised to influence the Federal Reserve’s stance on potential adjustments to borrowing costs in 2024.
Amid this sentiment, the dollar experienced a slight decline, alleviating some pressure on crypto markets.
Within the past 24 hours, Bitcoin surged by 2.5% to reach $62,639.1 by 08:16 ET (12:16 GMT), rebounding from the brink of breaching the critical $60,000 support level.
However, over the preceding seven days, the cryptocurrency endured a 2% decline, partly fueled by apprehensions regarding heightened regulatory scrutiny in the United States, compounded by sustained capital outflows from crypto investment products, notably spot Bitcoin exchange-traded funds (ETFs).
As the U.S. dollar, a significant factor influencing Bitcoin and crypto valuations, exhibited a slight downturn on Monday, all eyes turned to the impending release of the consumer price index (CPI) report for April. The market awaits further cues from the producer price index data set for Tuesday, followed by the more pivotal consumer price index reading scheduled for Wednesday.
The emergence of persistent inflationary signals is poised to temper expectations of premature interest rate cuts by the Federal Reserve, a scenario unfavorably perceived by crypto markets. Notably, cryptocurrencies typically thrive in environments characterized by low interest rates and ample liquidity, contrasting the implications of sustained elevated U.S. rates.
The week ahead also promises additional insights from Federal Reserve officials, following a spate of comments questioning anticipations of early rate adjustments.
In an attempt to galvanize market sentiment, presidential candidate Donald Trump vocalized support for the crypto industry while condemning perceived attempts by the Biden administration to stifle its growth. Trump further disclosed willingness to accept crypto donations for his campaign, yet these statements provided only modest support to crypto prices.
Looking ahead, market analysts caution that failure to uphold the $60,000 level could instigate a panic sell-off in Bitcoin. FxPro trader Alex Kuptsikevich underscored the significance of surpassing $65,000 to engender a bullish market sentiment. Since March, Bitcoin has oscillated between $60,000 and $70,000, with the anticipated halving event in April failing to catalyze sustained upward momentum, culminating in a ‘sell-the-news’ dynamic.
Amid this uncertainty, broader cryptocurrency prices exhibited mixed performance, with Ethereum climbing 1% to $2,959.61, while XRP rose by 0.4%, and Solana experienced a marginal decline of 0.16%. Memecoins also demonstrated varied performance, with Dogecoin registering a slight 0.1% decrease.
