NEW YORK - Bitcoin investors faced a setback today as the cryptocurrency retreated to $36,880, erasing the 5% gains achieved over the past week. The digital currency briefly touched $37,900 on Wednesday, marking its first approach to the $38,000 threshold since May 2022. However, the anticipation of upcoming US CPI data and a speech by Federal Reserve Chair Jerome Powell prompted a more cautious stance among traders.
The expected October Headline CPI is anticipated to show a modest rise of only 0.1% month-over-month, a sharp decline from the 0.4% increase seen in September. This projection has contributed to a sideways trend in Bitcoin as market participants navigate the uncertainty. Typically, higher inflation rates lead to increased selling pressure on risk assets like Bitcoin due to concerns over purchasing power and economic stability.
Jerome Powell's recent remarks did not exclude further interest rate hikes to maintain price stability, yet investors seem to be betting that the Federal Reserve may pause additional increases for the time being.
The Core CPI inflation rate, which strips out volatile items such as food and energy, is expected to remain high at an annual rate of 4.1% and a monthly rate of 0.3%, it could have a positive effect on equities while putting pressure on the US Dollar.
Bitcoin's price fluctuations are often influenced by macroeconomic indicators, which can cause short-lived volatility in its market value. At the time of reporting, Bitcoin's price stood at $36,929 on Binance, reflecting the market's sensitivity to economic releases and central bank policies.
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