Bitcoin‘s price dipped slightly on Thursday, remaining within a defined trading range as traders awaited key U.S. economic data that could influence interest rate decisions. This anticipation kept market participants cautious.
Despite easing concerns over a potential massive sell-off by the defunct exchange Mt. Gox, Bitcoin faced pressure from a stronger U.S. dollar. The dollar rose to a two-week high as traders anticipated upcoming economic data, favoring the greenback over other assets.
Bitcoin dropped 1.1% in the past 24 hours to $68,083.9 by 01:30 ET (05:30 GMT), staying within the $60,000 to $70,000 range it has occupied since mid-March.
Inflation and Interest Rate Concerns Weigh on Bitcoin
Crypto markets have been under pressure following hawkish remarks from the Federal Reserve over the past two weeks. Several Fed policymakers have indicated that they need more evidence of declining inflation before adjusting rates, putting a spotlight on upcoming U.S. economic data.
A revised reading on first-quarter U.S. gross domestic product (GDP) data is expected later on Thursday, with any indications of economic strength potentially giving the Fed justification to maintain higher rates longer. Additionally, traders are closely watching the Personal Consumption Expenditures (PCE) price index data, the Fed’s preferred inflation gauge, due on Friday.
The anticipation of continued high rates has led traders to scale back expectations of a rate cut in September, bolstering the dollar and weighing on risk-driven assets like cryptocurrencies. High interest rates generally reduce the appeal of speculative assets.
Crypto Investment Inflows Continue Despite Market Pressure
Despite the overall market pressure, recent data indicated that crypto investment products experienced a third consecutive week of inflows. Ether, in particular, saw increased inflows driven by optimism over the potential U.S. approval of an exchange-traded fund (ETF) that directly tracks the world’s second-largest cryptocurrency.
Ether and Altcoins Decline Amid ETF Approval Uncertainty
Ether fell 2.3% to $3,780.62 on Thursday, pulling back from recent two-month highs as the initial excitement over an immediate spot Ether ETF approval subsided. While the Securities and Exchange Commission (SEC) approved applications from major exchanges to list potential spot ETF products, the regulator still needs to review applications from potential issuers, suggesting a listing is not imminent.
Other altcoins also declined amid concerns over interest rates. SOL and XRP fell 0.7% and 2.3%, respectively, while meme tokens SHIB and DOGE each lost over 3%.
