Bitcoin kicked off the trading session on Wednesday largely unchanged, awaiting US inflation reports later today for fresh direction.
The largest cryptocurrency by market cap held slightly above $19,500 during Asian trading sessions. While it has remained unchanged for the day, Bitcoin has been down 11% since the end of last week. Global markets are also taking a breather as investors look forward to Wednesday’s inflation data report.
Analysts expect the inflation reading to come in at 8.8%, slightly above May’s 8.6% reading. With this in view, experts predict that the Federal Reserve will continue on its aggressive monetary hikes, which could force speculative investments like cryptocurrencies further lower. On the flip side, a weaker inflation data reading will stook activities in the market.
According to Chris Weston, head of research at Pepperstone Group, a headline inflation report below 8.5 per cent could weaken the dollar in the interim, pushing crypto prices up 5%.
Meanwhile, Fed’s aggressive rate hikes, the Terra system failure and the crypto hedge fund crisis rocking Three Arrows Capital, Voyager Digital and Celsius have contributed to the over 58% loss in Bitcoin in 2022.
As of Wednesday, CoinGecko data puts the crypto market cap at $906 billion, a significant drop
from November’s high of $3 trillion.
According to Technical analyst Katie Stockton, co-founder of Fairlead strategies, Bitcoin could test the $18,300 to $19,500 price range in the long term.
Besides Bitcoin, other cryptocurrencies have been on the back foot in the last couple of weeks. While Ethereum rose slightly last week, it has dropped significantly this week. In the last two days, it has dropped by over 7%. It is currently trading at $1,057 on major exchanges.
BNB, which rallied to as high as $245 last week, has edged lower in the last couple of days. The third-largest cryptocurrency by market cap has shed 8% of its value this week and is now trading at $223.8 on major exchanges.
With very little action in the crypto market on Wednesday, traders will look forward to the inflation data report later today for fresh impetus.