May 15 2024: Bitcoin prices dipped slightly on Wednesday, with limited positive movement despite a weakening dollar, as traders remained cautious ahead of key U.S. consumer inflation data.
The world’s largest cryptocurrency fell 0.9% over the past 24 hours, reaching $61,974.9 by 01:28 ET (05:28 GMT).
Bitcoin saw minimal relief even as the dollar declined on Tuesday, following Federal Reserve Chair Jerome Powell’s comments that current monetary policy is sufficiently restrictive, suggesting no further interest rate hikes. However, Powell expressed little confidence that inflation is moving back towards the 2% annual target.
This came after hotter-than-expected producer price index data for April, potentially setting the stage for a strong consumer price index reading later on Wednesday.
Signs of diminishing capital flows into Bitcoin and other crypto investment products, coupled with the threat of increased regulatory action, also kept market sentiment muted.
Hong Kong Crypto ETFs See Significant Outflows:
Three spot Bitcoin and Ethereum exchange-traded funds in Hong Kong experienced substantial outflows of nearly $40 million on Monday, erasing two weeks of inflows since their debut on April 30.
While the immediate reason for these outflows is unclear, they occurred as sentiment towards Hong Kong and Chinese markets soured amid increased U.S. trade tariffs on Beijing and mixed economic signals from China.
Outflows from the Hong Kong ETFs coincided with dwindling capital inflows into their U.S. counterparts, as the initial hype over the approval of spot Bitcoin ETFs for U.S. markets faded. Although this hype initially drove Bitcoin to record highs of over $73,000 in early March, the cryptocurrency has largely traded within the $60,000 to $70,000 range for the past two months, with few positive cues.
Bitcoin’s halving event had little impact on price, while the threat of further regulatory action by the U.S. Securities and Exchange Commission kept traders wary of crypto markets.
Crypto Prices Today: Altcoins See Extended Losses Ahead of CPI Data:
Broader cryptocurrency prices also declined as traders became more risk-averse ahead of the U.S. CPI data.
Ethereum, the second-largest cryptocurrency, fell more than 1%, while Solana and XRP lost 3% and 1.2%, respectively.
Gains in meme stocks such as GME and AMC inspired brief gains in meme tokens, but Dogecoin fell more than 3%, and Shiba Inu lost nearly 3%.
Persistent U.S. inflation is likely to keep interest rates high for longer, a scenario that is unfavorable for crypto markets, which typically thrive in low-rate, high-liquidity environments.