- Bitcoin pulled back to trade at just a hair over US$23,000 into the week, taking along a slew of other cryptocurrencies with it, including Ether, Solana and Cardano.
- If inflation is higher than forecast, or worse, more than 9.1%, then Bitcoin bulls should brace themselves for a bout of battering.
Traders are taking some money off the table as they sit on the sidelines ahead of a key U.S. inflation data report due out later today, and which will likely set expectations for rate hikes next month by the U.S. Federal Reserve.
After soaring to as high as US$24,200 last week, Bitcoin pulled back to trade at just a hair over US$23,000 into the week, taking along a slew of other cryptocurrencies with it, including Ether, Solana and Cardano.
Bitcoin’s rally stalled ahead of CPI data being released by the U.S. Department of Labor, but if price pressures are showing signs of easing, the benchmark cryptocurrency could possibly sustain a push over US$24,000, a key level of resistance.
Media economist estimates for July inflation suggest that CPI data is likely to come in at 8.7%, down from the 9.1% printed in June, but still well off the Fed’s 2% target.
If inflation is higher than forecast, or worse, more than 9.1%, then Bitcoin bulls should brace themselves for a bout of battering.
However, that outcome seems unlikely.
There are signs in the U.S. that inflation may already have peaked, with benchmark oil prices having traded durably below US$100 for weeks now and a gallon of gasoline well below US$5, which should help price pressures.
Wheat futures have also fallen significantly, as have a slew of other commodity prices, now down from their all-time-highs.
At least part of Bitcoin’s ascent can be put down to excessive levels of liquidity in the system as well as depressed yields, and the Fed flooding the markets with money may have caused cryptocurrencies to surge a lot more than deserved.
Nevertheless, Bitcoin continues to trade above several closely-watched price levels and July was the best month for the cryptocurrency since October 2021.
