On Wednesday, the price of bitcoin fell by 0.9%, despite a weaker dollar and a small positive movement. Traders remained cautious in anticipation of important data on consumer inflation in the United States. Writes UNN with reference to Investing.com.
Details
Bitcoin did not show any growth despite the dollar's drop on Tuesday after comments by Federal Reserve Chairman Jerome Powell. He noted that the current financial policy is quite strict and no further interest rate hikes are expected. However, Powell noted that there is uncertainty about the reduction of inflation to the 2% per year target.
This comes as April's producer price index data came in higher than expected, which may indicate a future rise in the consumer price index. In addition, declining investment in bitcoin and regulatory risks are reducing interest in cryptocurrencies.
In Hong Kong, three Bitcoin and Ethereum spot exchange-traded funds saw significant outflows of nearly $40 million on Monday, reversing the effect of the previous two-week inflows after their launch on April 30. The reason for the outflows remains unclear, but it comes amid deteriorating sentiment toward Hong Kong and China, particularly due to increased U.S. trade tariffs on Chinese goods and mixed economic signals from China.
At the same time, there has been a decline in interest in the US counterparts of these ETFs following a decline in enthusiasm for their approval. Despite the initial enthusiasm that pushed bitcoin to a record high of $73,000 in March, the cryptocurrency has been trading in the $60,000 to $70,000 range for the past two months.
Bitcoin's halving session was marked by no significant price changes, and regulatory threats from the US Securities and Exchange Commission are keeping traders from taking active steps in the cryptocurrency markets. Amid expectations of new data on the US consumer price index, the overall cryptocurrency market is showing a decline. Ethereum lost more than 1%, while Solana and XRP fell by 3% and 1.2%, respectively.
The rise of meme stocks such as GME and AMC has spurred rapid growth in meme tokens, but Dogecoin fell by more than 3% and Shiba Inu lost almost 3%. Continued inflation in the US may keep interest rates high, which negatively impacts cryptocurrency markets, which thrive better with low rates and high liquidity.
Recall
On Monday, the price of bitcoin fell , which again activated key support levels. This happened amid a slight improvement in cryptocurrency sentiment ahead of the publication of US inflation data that could affect interest rates.