May 30 2024: Bitcoin’s price dipped slightly on Thursday, staying within a narrow trading range as traders awaited key U.S. economic data that could influence interest rate outlooks.
Although easing fears of a major sell-off by the defunct exchange Mt Gox provided some support for Bitcoin, this was offset by the strengthening U.S. dollar, which reached a two-week high. The anticipation of more economic data prompted traders to favor the dollar.
In the past 24 hours, Bitcoin decreased by 1.1%, reaching $68,083.9 by 01:30 ET (05:30 GMT). The leading cryptocurrency has remained within the $60,000 to $70,000 range since mid-March.
Inflation and Interest Rate Concerns Pressure Bitcoin
Crypto markets have been impacted by hawkish comments from the Federal Reserve over the past two weeks, with several policymakers indicating that more evidence is needed to confirm that inflation is decreasing. This has turned attention to upcoming U.S. economic reports. A revised reading of the first-quarter U.S. GDP data is due later on Thursday, and signs of economic resilience could give the Fed more reason to maintain higher interest rates.
More significant will be the PCE price index data, the Fed’s preferred inflation measure, expected on Friday.
Traders are reducing their expectations for a Fed rate cut in September, boosting the dollar and negatively affecting most risk-sensitive assets, including cryptocurrencies. High interest rates are generally unfavorable for crypto, as they reduce the appeal of speculative investments.
Despite this, recent data indicates a third consecutive week of inflows into crypto investment products, with Ether seeing increased inflows due to optimism over the potential approval of an ETF directly tracking the second-largest cryptocurrency.
Crypto Price Update: Ether and Altcoins Decline
Ether dropped by 2.3% to $3,780.62 on Thursday, further retreating from recent two-month highs as excitement over the immediate approval of a spot Ether ETF waned. Although the Securities and Exchange Commission approved applications for major exchanges to list potential spot ETF products, the regulator still needs to review applications from potential issuers, meaning a listing is not imminent.
Other altcoins also declined due to concerns over interest rates. SOL and XRP fell by 0.7% and 2.3%, respectively, while meme tokens SHIB and DOGE each lost over 3%.
