BitcoinBTCUSD –1.14% and other cryptocurrencies edged higher Monday, with digital assets primed to react to key macroeconomic forces in the coming days with U.S. inflation data and a decision on interest-rates from the Federal Reserve.
The price of Bitcoin has risen 1% over the past 24 hours to above $26,000, on the lower end of the trading range between $26,000 and $27,000 that has dominated since the largest digital asset slid back from 10-month highs above $30,000 in April. Bitcoin tumbled to $25,500 last week and again in volatile weekend trading following a U.S. regulatory crackdown, with the Securities and Exchange Commission charging exchanges Binance and Coinbase Global (ticker: COIN) in the past week. Cryptos though mostly have shaken off regulatory pressures for now.
We’ve just had crypto’s most seismic week since the implosion of FTX, and the regulatory reverberations will be felt into the distant future, however the attention now turns to this week’s macro double-header,” said Antoni Trenchev, co-founder and managing partner at crypto lender Nexo.
Indeed, Bitcoin is likely to move in tandem with the stock market this week, reacting alongside the Dow Jones Industrial Average and S&P 500amid major macro news. Tuesday will see the release of the U.S. consumer-price index (CPI) for May—representing key inflation data—before Wednesday ushers in the next decision on interest rates from the Fed.
A dramatic rise in interest rates since March 2022 has been a driving force behind declines in digital assets, and Bitcoin’s rally this year—a rise of some two-thirds—has come amid expectations that rate increases will soon end and eventually reverse. Investors want to see the Fed hit the pause button on rates for the first time in this cycle, but also wil scrutinize communications from the central bank on whether more rate hikes are likely to come in the months ahead.