Bitcoin has seen a rollercoaster year since the crypto winter in 2022. According to Binance charts, the live price of Bitcoin stands at $ 29,340.32 per (BTC / USD) with a current market cap of $ 570.55B. BTC is +1.64% in the last 24 hours, and it remains clear that BTC bulls have a lot of work ahead of them.
CPI data set to affect the crypto industry
Bitcoin bulls are looking for more good news on the inflation front in the United States from the Bureau of Labour Statistics’ July Consumer Price Index report, which is due out Thursday morning.
Economists predict a 0.2% growth on a monthly basis, the same as in June. Year-on-year growth is expected to be 3.3%, up from 3% in June. Headline inflation, which excludes seasonal factors and includes volatile food and energy costs, peaked at 9.1% in June 2022 and was running at an 8.5% rate in July of last year.
The core CPI, which excludes more volatile food and energy expenses, is forecast to be 0.2% in July, the same as in June. The annual core CPI rate is predicted to fall from 4.8% to 4.7%. Core CPI peaked at 6.5% in March 2022, and the yearly figure was 5.9% a year earlier in July.
With the goal of taming soaring inflation in 2022, the Federal Reserve began a series of rate hikes early last year, raising the fed-funds rate from a range of 0% to 0.25% to the current 5.25%-5.50%.
That historic rate of monetary tightening was at least partly responsible for the steep drop in the price of bitcoin, which fell from about $69,000 late in 2021 to around $16,000 at the end of 2022.
While the largest crypto is up 75% this year, the recovery has been somewhat modest in comparison to the magnitude of the previous drop, with bitcoin — now priced at around $29,000 — still down roughly 58% from its all-time high.
To the degree that Fed tightening contributed to bitcoin’s price drop, the slowdown and maybe end of that tightening has been cited as a cause in the cryptocurrency’s minor comeback. While the low CPI figure from Thursday may support that notion, short-term interest rate traders have already priced in no more Fed rate hikes this year. According to CME Group’s forecast for next year, traders expect the US Federal Reserve to lower interest rates as soon as February.
Bitcoin bulls have so much work to do
After a weekend of sideways trading, the start of US trading gave no signs of respite for bulls, with traders and experts already forecasting a lower outcome once the impasse was broken.
According to CoinGlass data, total BTC long liquidations on the day exceeded $10.5 million. The total value of cross-crypto long liquidations was $60 million.
Bitcoin (BTC) gained 0.90% on Monday. BTC ended the day at $29,754 after finishing the day unchanged on Sunday. Significantly, Bitcoin fell below $30,000 for the fifth session in a row.
It was a busy start to the week, with news of PayPal (PYPL) introducing PayPal USD (PYUSD), a dollar stablecoin backed by US dollar deposits, short-term US Treasuries, and other cash equivalents, redeemable 1:1 for the dollar, hitting the wires. The PYUSD cryptocurrency is an ERC-20 token issued on the Ethereum blockchain.
While the introduction of PYUSD has no direct effect on the adoption of BTC, the rising adoption of cryptocurrencies and digital currencies is price positive.
However, uncertainty regarding the SEC’s approval of spot BTC ETF applications and the SEC’s intention to appeal the SEC v. Ripple decision remained headwinds.
Investors should keep an eye on the crypto news wires. The SEC v. Ripple case, ETF updates, and Binance and Coinbase (COIN)-related news will all move the needle.
However, US legislative activity and SEC activity must also be considered. Legislation establishing a crypto regulatory framework that promotes innovation while safeguarding consumers should benefit BTC and the broader market.