Bitcoin and other cryptocurrencies dipped on Thursday, giving up gains made on Wednesday following the release of widely anticipated US inflation data. At least one expert believes the price dynamics are gloomy.
Unfortunately, our worst crypto price prediction came true. Bitcoin’s price has dropped less than 1% in the last 24 hours to $27,450. After the publication of the US consumer price index (CPI), the largest digital asset soared to nearly $28,500 on Wednesday but has since dropped back below where it was trading before the CPI data propelled cryptos higher. Bitcoin remains below the psychologically significant $30,000 level, which it crossed last month for the first time since June 2022 but failed to recapture in May.
According to Alex Kuptsikevich, an analyst at broker FxPro, price dynamics are becoming progressively bearish: a sequence of sliding highs, a consolidation below the 50-day moving average, and a breach of the April lows indicate that sellers are in control.
In theory, Bitcoin should have held or even extended gains when data indicated signs of slowing inflation. That’s what happened to tech equities, with the Nasdaq Composite outperforming the Dow Jones Industrial Average and the S&P 500 on Wednesday and expected to do so again on Thursday.
CPI statistics reiterated views that the Federal Reserve would not continue to raise interest rates to manage inflation, which should help crypto price prediction and tech stocks, as both are risk-sensitive assets with lower demand in a higher-rate environment. It may be a concerning development that a risk-on macroeconomic catalyst failed to send Bitcoin back above technical levels, leaving cryptos susceptible to the publication of fresh inflation data, the producer-price index (PPI), later Thursday.
Not in crypto price prediction, but in today’s data aside from Bitcoin, Ether, the second-largest cryptocurrency, fell 1% to $1,820. Smaller cryptos or altcoins performed more inconsistently, with Cardano rising 2% but Polygon falling 1%. Memes Coins were scarcely affected, with Dogecoin down less than 1% and Shiba Inu remaining relatively unchanged.