As the US inflation rate data has been released, the crypto community, including numerous Bitcoin investors, eagerly await the impact on the market. It is interesting to note how closely the global economy and cryptocurrencies are becoming more interconnected. The recent announcement of inflation rates has focused attention on the potential influence on Bitcoin’s price. In May, the US Consumer Price Index (CPI) increased by 0.4% in both overall and core CPI, contributing to a year-over-year rise of 5.0% and 4.0% respectively.
This increasing inflation is a cause for concern and has led investors to question what influence these figures will have on the US dollar and the cryptocurrency market, particularly Bitcoin. As concerns over inflation persist, Bitcoin has attracted investors as a hedge against inflation.
Adding to the market turbulence, the cryptocurrency market recently experienced a crash sparked by rumors of the US government selling off cryptocurrency wallets. This Fear, Uncertainty, and Doubt (FUD) led to panic selling and significant losses among traders. Although the rumors turned out to be false, the financial damages remained.
This market turbulence was influenced in part by reports suggesting the US government may be moving funds from seized wallets, including those associated with the notorious Silk Road marketplace. According to blockchain analytics provider Glassnode, about 18,860 coins worth around $418 million were transferred, reducing the government’s estimated wallet balance to 125,600 BTC. The mempool tracker suggests up to 40,000 BTC could have been involved in the transaction, with around 25% going to Coinbase.
As uncertainty remains and the Bitcoin market remains volatile, investors are keeping a close eye on whether the US government will sell off more of its seized cryptocurrency. Cryptocurrency enthusiasts would be wise to remember the importance of verifying information before making trading decisions.
Currently, Bitcoin is trading at $27,900 and has a market capitalization of $540 billion. However, it is encountering difficulties in surpassing the significant resistance level of $27,700. This could potentially indicate a bearish sentiment taking over as bullish efforts struggle to break through. Bitcoin’s trading range currently lies between $27,250 and $27,700.
Should Bitcoin surpass the crucial resistance level of $27,700, its potential to rise to $28,050 and even $28,650 may be well within reach. Conversely, if it fails to break through the resistance, traders may consider shorting Bitcoin with targets set at $27,450 and $27,150. As the market awaits further positive developments, Bitcoin’s upward momentum hangs in the balance.
Source: Cryptonews
