Bitcoin clings to $30,000, as it awaits the U.S. CPI
Bitcoin clings to the $30,000 level on Wednesday (-0.17%, $30.037) as it awaits the release of the March U.S. CPI and reactions from this benchmark regarding the upcoming May Federal Reserve (Fed) rate decision.
The headline inflation rate is expected to fall to 5.2% from 6% and core inflation is expected to rise from 5.5% to 5.6%. In theory, if these estimates are met, and following the March employment data released last Friday on the other side of the Atlantic, a 25 basis point rate hike by the Fed next month is to be expected. However, should the data surprise positively and fall further, then some are not ruling out the Fed not touching rates in May, which would be welcomed by Bitcoin.
"Inflation is expected to soften and a lower than expected figure could boost gains in Bitcoin and other major cryptocurrencies," commented Wael Makarem, senior market strategist - MENA at Exness. "Although markets mostly expect a rate hike at the next Fed meeting, some investors are holding out hope for a pause," he added.
Makarem highlights that compared to other digital assets, Bitcoin has been increasing its market share and has seen a sharp rise in its market dominance since the beginning of the year, while advancing to levels not seen since early 2021. "The loss of confidence in other cryptocurrencies, including stablecoins, and the difficulties of some cryptocurrencies could continue to fuel a move toward Bitcoin and away from assets that are seen as potentially riskier," he stated.
Ethereum has been able to maintain a relatively stable share of total cryptocurrency market capitalization over the past two years and could find support in the upcoming software update.
"The change should offer a clearer view to investors interested in the asset, as coins stored in Ethereum's betting system will be unlocked. At the same time, the upgrade could open the door to a possible selling trend that could lead to significant volatility," the expert stressed.
The Tron token plummets today, on Wednesday, after Binance announced that it will remove it from its platform. However, this will only affect the token offering on Binance's U.S. arm, not on Binance.com global.
"From the standpoint of Bitcoin, none of this matters; the rally is on and the momentum is here to stay, as the price has penetrated a major price level of 30K, and the next big barrier is at 50K," noted Naeem Aslam, director of analytics at Zaye Capital Markets.
Translator: Alejandra Zamora