Bitcoin experienced a slight uptick in price on Wednesday, buoyed by modest positive movement amidst a weakening dollar, as investors awaited a crucial U.S. consumer inflation report.
The world’s largest cryptocurrency saw a 1% increase over the past 24 hours, reaching $62,489.1 by 07:58 ET (11:58 GMT).
The uptick in Bitcoin‘s price coincided with a decline in the dollar following remarks from Federal Reserve Chair Jerome Powell, who signaled that current monetary policy would remain unchanged, suggesting no further interest rate hikes. However, Powell cautioned that the central bank lacked confidence in inflation returning to its 2% annual target.
This follows the release of hotter-than-expected producer price index (PPI) data for April, setting the stage for potentially robust consumer price index (CPI) figures later in the day.
Despite these positive indicators, concerns lingered over dwindling capital flows into Bitcoin and crypto investment products, coupled with the looming threat of increased regulatory scrutiny.
Hong Kong ETFs Experience Significant Outflows
Three spot Bitcoin and Ethereum exchange-traded funds (ETFs) in Hong Kong witnessed substantial outflows of nearly $40 million on Monday, erasing two weeks of inflows since their launch on April 30.
While the immediate cause for the outflows remains unclear, they coincided with a downturn in sentiment towards Hong Kong and Chinese markets, amid escalating U.S. trade tariffs on Beijing and mixed economic signals from China.
These outflows occurred amid a broader decline in capital inflows into U.S. ETF counterparts, following waning enthusiasm over the approval of spot Bitcoin ETFs for U.S. markets.
Bitcoin’s Trading Range Persists Amid Regulatory Uncertainty
Despite initial excitement surrounding the approval of spot Bitcoin ETFs, Bitcoin has largely traded within a range of $60,000 to $70,000 over the past two months, with little momentum from positive developments.
The recent halving event had minimal impact on Bitcoin’s price, while ongoing regulatory concerns from the U.S. Securities and Exchange Commission have contributed to trader caution in crypto markets.
Altcoins Retreat Ahead of CPI Data
In addition to Bitcoin, other cryptocurrencies experienced declines as traders adopted a more risk-averse stance ahead of the U.S. CPI data release.
Ethereum, Solana, and XRP registered losses of 0.25%, 1.6%, and 1.1% respectively, while meme tokens such as Dogecoin and Shiba also saw declines.
Sticky U.S. inflation prospects suggest prolonged high-interest rates, posing challenges for crypto markets typically buoyed by low-rate, high-liquidity environments.
Analyst Warnings on Miner Sell-Off
Bitcoin miners have reduced their coin inventory ahead of the reward halving on April 19, a trend that could resume as blockchain usage becomes cheaper, potentially squeezing miners’ revenue.
According to analysts at Kaiko, declining daily average network fees post-halving may lead to selling pressure from miners, exacerbating downside risks already posed by Mt.Gox’s $9 billion payout to creditors.
