Dec 11 2024: Bitcoin prices remained stable on Wednesday, recovering slightly from a recent downturn as traders avoided significant moves ahead of critical U.S. inflation data. This data is expected to influence the Federal Reserve’s outlook on interest rates.
The world’s largest cryptocurrency stayed firmly within its established range of $90,000 to $100,000 over the past few weeks, with optimism about favorable regulations under incoming President Donald Trump cooling off.
Broader cryptocurrency markets faced sharp losses, reflecting reduced risk appetite due to heightened geopolitical tensions in the Middle East and Asia. Additionally, profit-taking after a strong rally in November weighed on prices. Bitcoin rose by 0.6% to $97,483.5 as of 00:53 ET (05:53 GMT).
CPI Data in Focus for Interest Rate Clues
Investors are focused on U.S. consumer price index (CPI) inflation data, set to provide guidance on the Federal Reserve’s monetary policy direction.
The data comes just a week before the Fed’s policy meeting, where a 25-basis-point rate cut is widely anticipated. However, uncertainty remains regarding the long-term trajectory of interest rates due to signs of persistent inflation. Expansionary and protectionist policies under Trump are also expected to sustain inflation, potentially leading to higher rates in the future.
Elevated interest rates could negatively impact speculative assets like cryptocurrencies by restricting liquidity, limiting investor participation.
MicroStrategy Speculated to Join Nasdaq 100
Shares of MicroStrategy Incorporated (NASDAQ:MSTR), the largest corporate Bitcoin holder, gained on Tuesday amid speculation that the company might be added to the Nasdaq 100 index. This inclusion could drive further buying, with Bloomberg analyst Eric Balchunas estimating that exchange-traded funds might purchase at least $2.1 billion worth of MicroStrategy shares for exposure.
MicroStrategy’s stock has surged by approximately 450% this year, fueled by its aggressive Bitcoin acquisitions funded through debt issuance.
Altcoin Market Sees Mixed Performance
The broader altcoin market displayed mixed results on Wednesday following significant profit-taking.
- Ether (ETH): Dropped 1.1% to $3,661.36.
- XRP: Stabilized at $2.3368 after bouncing back from a 10-day low.
- Solana (SOL): Gained 1.3%.
- Cardano (ADA) and Polygon (MATIC): Remained flat.
- Dogecoin (DOGE): Fell by 3.4%.
Despite recent declines, most cryptocurrencies remain significantly higher for the year, with traders keeping a close eye on macroeconomic developments for further direction.
