Bitcoin prices have stagnated around the $28,000 level for weeks.
Ozan Kose/AFP via Getty Images
Bitcoin
and other cryptocurrencies edged higher Monday, remaining at some of the highest levels for digital assets since last summer, as traders eye inflation data in the coming days as possible catalysts for the next leg upward.
The price of Bitcoin has risen 1.5% over the past 24 hours to $28,325. The largest digital asset has been hovering around $28,000 for weeks now, spiking as high as near $29,500 amid bouts of enthusiasm—representing the highest point since the crypto crash accelerated into a brutal bear market last June. Up some 70% so far this year, Bitcoin’s rally has spurred calls for a new crypto bull market.
“Bitcoin failed to pick a direction after U.S. jobs report’s mixed result last Friday,” said Yuya Hasegawa, an analyst at crypto exchange Bitbank. “U.S. CPI for the month of March, which will be released coming Wednesday, could be a catalyst for Bitcoin to test and surpass its $28,800 to $29,000 resistance area for the past three weeks.”
Indeed, Bitcoin remains highly sensitive to the macroeconomic backdrop and remains correlated with the stock market, swinging in step with the
Dow Jones Industrial Average
and
S&P 500
as a leading indicator for risk sentiment. Much of the focus has been on U.S. economic data that could inform the Federal Reserve’s next move on interest rates, though the jobs report last Friday failed to move the needle much.
Aggressive monetary policy and a spate of interest-rate hikes from the Fed over the past year—a bid to tame decades-high inflation—has been a critical headwind for crypto prices and stocks alike, dampening demand for riskier assets. Much of the rally in Bitcoin since the start of 2023 has come amid expectations that the Fed will soon become more accommodative, including possibly taking its first breather in this rate-hike cycle when its policy-setting committee meets over May 2-3.
Ahead of the next Fed decision in May, inflation data due this week loom large. The March consumer-price index (CPI), a leading inflation indicator, will be released Wednesday while Thursday will usher in last month’s producer-price index (PPI).
Traders expect these data points, whether they spur expectations holding rates steady in May or solidify bets of yet another rate hike, could help shake Bitcoin out of its recent holding pattern.
“Bitcoin has been consolidating sideways, around $28,000, for three weeks now,” said Alex Kuptsikevich, an analyst at broker FxPro. “On the daily timeframe, the range has narrowed since the beginning of the month, forming a bullish triangle. It is believed that the price will continue to move toward the breakout, with a rise above $29,000 opening the way to $35,000, while a break below $27,500 may pave the way to $25,500.”
Beyond Bitcoin,
Ether
—the second-largest crypto—advanced 1% to $1,860. Smaller cryptos or altcoins were more muted, with
Cardano
and
Polygon
each up less than 1%. It was more of the same from memecoins, with
Dogecoin
up 2% and
Shiba Inu
gaining less than 1%.
Write to Jack Denton at [email protected]
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