May 31 2024: Bitcoin’s price edged higher on Friday as traders remained cautious about cryptocurrencies ahead of crucial U.S. inflation data, which could influence future interest rate decisions. Despite the cautious sentiment, Bitcoin showed strong gains for May.
Cryptocurrency prices showed little reaction to an overnight decline in the dollar, as concerns about prolonged high-interest rates persisted despite a downward revision to first-quarter gross domestic product data.
Bitcoin rose 1.1% over the past 24 hours to $68,558.5 by 08:32 ET (12:32 GMT), and was set to increase nearly 13% in May.
However, despite its gains for the month, Bitcoin continued to trade within the $60,000 to $70,000 range that has been established since mid-March.
Inflation and Interest Rates in Focus Ahead of PCE Data
The primary factor behind Bitcoin’s limited movement was the fear of high interest rates, which dampened the outlook for the cryptocurrency and the broader market.
Several Federal Reserve officials have recently expressed doubts about inflation easing, complicating the central bank’s plans to lower interest rates.
These remarks preceded the release of the key PCE price index data, the Fed’s preferred inflation measure, due later on Friday. The reading is expected to show a slight cooling in April’s inflation but still well above the Fed’s 2% annual target.
The prospect of prolonged high interest rates is negative for cryptocurrency markets, as it implies tight liquidity and reduces the attractiveness of high-risk, speculative assets.
Mixed Performance in Crypto Markets; Ether Gains on ETF Hype
Broader cryptocurrency markets experienced mixed performance on Friday.
Ether, the world’s second-largest cryptocurrency, increased by over 1.7% to $3,807.08. Ether is set to rise nearly 25% in May, with most of the gains coming in the past week following positive signals from the Securities and Exchange Commission regarding the approval of an exchange-traded fund (ETF) that directly tracks the token. However, a final decision on the listing of a spot Ether ETF is still pending.
Meanwhile, XRP remained flat, and Solana (SOL) added 1.5%. SOL was also a notable performer in April, with a 30% increase.
TRUMP Meme Coin Experiences Volatility Following Guilty Verdict
A New York jury found former U.S. president Donald Trump guilty in the widely publicized hush money trial.
Following the verdict, the TRUMP meme coin plummeted by as much as 35%. However, the cryptocurrency later rebounded and was trading up 19% at the time of writing.
The jury found Trump guilty on all 34 counts of falsifying business records, marking the first time a U.S. president has been convicted of a felony.
Other meme coins saw limited price movements, with DOGE/USD remaining flat and the Investing.com Shiba Inu Index dropping 0.3%. Conversely, PEPE/USD was trading 10% higher.
