As Bitcoin (BTC) lingers around mid-$27,000 levels, the focus for many now turns to the U.S. inflation report, expected on Wednesday. Some experts believe that the unwavering backdrop over recent weeks creates anticipation around the report, as investors watch and wait for any shifts in the crypto market. Notably, senior market analyst Edward Moya suggests that the attention will be on Binance and storage of cryptos in cold wallets.
Moya contends that Bitcoin seems tied to a trading range, but a de-risking moment on Wall Street could push cryptocurrencies towards lows reminiscent of mid-March. Meanwhile, Ether (ETH) has experienced a 0.4% drop, and the overall crypto market performance measured by CoinDesk Market Index is up around half a percentage point.
The U.S. Federal Reserve’s next moves and their impact on the crypto market also come into the limelight. Investors are keen to know the forthcoming decisions, especially after the recent increase in the Federal Funds rate to its highest level in 16 years. Many believe that the outcome of the Consumer Price Index for April will provide a hint of how the Fed will act during the June policy meeting.
Mark Connors, Head of Research for Canadian crypto asset manager 3iQ, points towards the Fed for generating the recent banking crisis, claiming that the institution is working as “both arsonist and firefighter by design.” He states that the Fed’s reduction in banks’ footprint caused the loss of financial stability and increased reliance on foreign debt to GDP, eventually leading to inflation. On the other hand, he predicts that the Fed will pivot to a more dovish policy sooner or later.
Equity markets display mixed results, with the S&P 500, Nasdaq Composite, and the Dow Jones Industrial Average experiencing declines of 0.4%, 0.6%, and 0.1%, respectively. In bond markets, the 2-year Treasury yield rose 2 basis points to 4.02%, while the 10-year Treasury yield remained relatively unchanged.
As the crypto market awaits these critical financial indicators, cautious optimism lingers for blockchain enthusiasts. The decisions of the Fed and Wall Street have far-reaching effects, even in the decentralized and innovative realm of cryptocurrency.