Bitcoin‘s price saw little movement on Friday as cryptocurrency traders remained cautious ahead of crucial U.S. inflation data, which could influence the outlook for interest rates. Despite this, Bitcoin has posted strong gains in May.
Cryptocurrency prices showed limited reaction to an overnight decline in the dollar, as concerns about persistently high interest rates lingered, even after a downward revision to first-quarter gross domestic product data.
As of 01:13 ET (05:13 GMT), Bitcoin rose 0.5% in the past 24 hours to $68,489.9 and is set to increase nearly 13% for May. However, the token continues to trade within a $60,000 to $70,000 range established since mid-March.
Inflation and Interest Rates in Focus Ahead of PCE Data
Rate concerns have largely kept Bitcoin’s performance rangebound, as the prospect of sustained high interest rates has dampened the outlook for the cryptocurrency market. Several Federal Reserve officials have recently expressed doubts that inflation is easing, complicating the Fed’s plans to begin reducing interest rates.
These comments come ahead of the release of the Personal Consumption Expenditures (PCE) price index data, the Fed’s preferred measure of inflation. The data, expected later on Friday, is anticipated to show a slight cooling in inflation for April but still above the Fed’s 2% annual target.
The likelihood of prolonged high interest rates bodes poorly for crypto markets, as it signals tight liquidity and reduces the attractiveness of high-risk, speculative assets.
Broader Crypto Market Trends: Altcoins and Memes
The broader cryptocurrency market traded slightly lower on Friday. Ether, the world’s second-largest cryptocurrency, fell over 1% to $3,746.50. Nonetheless, Ether is on track for a nearly 25% gain in May, driven largely by excitement over the potential approval of an exchange-traded fund (ETF) that directly tracks the token. The Securities and Exchange Commission (SEC) has made progress in this area, though a decision on the actual listing of a spot Ether ETF remains pending.
Other altcoins also experienced declines. XRP fell 1.6%, while SOL dropped 2.8%. Despite this, SOL has been a standout performer, rising 30% in April.
Among meme tokens, SHIB, DOGE, and PEPE saw declines ranging from 3.6% to 7.7% on Friday. However, PEPE has surged over 100% in May, highlighting its volatility and speculative appeal.
As the market awaits key inflation data, the performance of Bitcoin and other cryptocurrencies remains closely tied to economic indicators and central bank policies.
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