- Market remains on edge as US inflation data is set to be published.
- Favorable data might likely push Bitcoin to the $35,000 price level in the near term.
Crypto investors are still looking forward to the release of the Consumer Price Index (CPI) scheduled for today Wednesday, July 12th. This data is crucial to the possible implementation of yet another 25 Basis Points (BPS) hike when the United States Federal Reserve’s Federal Open Market Committee (FOMC) convenes between July 25th and 26th.
Bitcoin (BTC) has been performing well and now its price seems to be at a standstill over the past few weeks. The leading cryptocurrency by market capitalization is now trading at a price of $30,648.54, up 0.61% over the past 24 hours. Bybit’s lead financial engineer, Ether Chen established that the broad crypto market is currently on standby, awaiting signals of price increase following a slowdown or pause in rate hikes in the second half of the year. He noted that this wait, when over, will likely be characterized by liquidity inflow.
Chen’s team believe that a full bull run would not happen until next year but at the same time, they expect that potential market recovery will commence by the fourth quarter of this year. However, this recovery would be subject to several components including the cessation of rate hikes, BTC halving sentiments and the resolution of regulatory storms which have become incessant in the crypto ecosystem.
Other major investment advisors have also projected a similar bull run for Bitcoin. Standard Chartered had earlier predicted a massive surge for Bitcoin citing the possibility of the coin reaching $120,000 by the end of 2024. While Tim Frost, the CEO of digital wealth platform Yield App dismissed this bold prediction, he still maintained that the leading crypto will enter its next bull market in 2024.
Bitcoin Investors to Expect More Rate Hikes
Several officials have hinted at the possibility of having more rate hikes before the end of the year. During her interview with the Financial Times yesterday, the President of the Federal Reserve Bank of Cleveland Loretta Mester said that there’s no reason for the Fed to discontinue further rate hikes. Similarly, Fed Chair Jerome Powell revealed to the U.S House Financial Services Committee that the former interest rate pause was only temporary.
According to Powell, the central bank executives are positive that there may be at least two more rate hikes before the end of 2023.
CPI is a pivotal index that checks price changes over a period of time. Traders are very interested in this data to measure if inflation in the United States is tapering down or not. Just like for other assets, BTC price movement is largely dependent on this inflation trend. This was recently seen in Larry Fink’s comment about the status of BTC. The BlackRock Chief Executive Officer (CEO) called the leading digital currency an “international asset,” and a possible hedge against inflation.
The U.S. stock market has also been fluctuating in anticipation of the CPI data and Fed interest rate decision. At this time, the probability of a 25 BPS hike by the Fed expected by market participants is pegged around 93%, according to CME FedWatch Tool and the market is likely to price in this certainty in the coming weeks.
Should this interest rate hike decision come as projected, we may see a push toward the $35,000 price level in the coming days or weeks.
