Will U.S. Inflation Data & FOMC’s Minutes Propel Bitcoin’s Price Above 30K?

Bitcoin’s price has been consolidating for almost three weeks, as it has been trading within the $28K range. Despite its stellar performance in the first quarter of 2023, the flagship cryptocurrency seems unsure of its future direction. However, things could turn around throughout this week — as critical macroeconomic data comes out — leading to a shift in its direction soon.

CPI Data & FOMC To Play Pivotal Roles

Considering the fact that the price of Bitcoin has been consolidating since March 17, market participants were taken aback on April 9 by late gains, which propelled BTC to local highs of $28,540 before settling back down to stabilize just slightly over $28,300. But, many expect greater volatility as the Consumer Price Index (CPI) print for March will be released on April 12 along with new details about Federal Reserve policy, making this week’s macroeconomic data releases crucial.

The release of the U.S. inflation data for March is often accompanied by increased volatility in risk assets, such as Bitcoin. The consumer price index gained 0.4% last month, putting the annual inflation rate at 6%, according to the U.S. Labor Department’s announcement on March 14. In the minutes following the announcement, the price of Bitcoin (BTC) reacted positively as it increased to a nine-month high of $25,484. BTC continued its upward trajectory by briefly surpassing the $26,000 level before sliding down to the $25,500 zone.

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Following the release of CPI data, the Federal Reserve is expected to issue the latest Federal Open Market Committee (FOMC) meeting minutes. Nonetheless, this results in a confusing situation for asset performance in response to the CPI, as traders hope for a faster than expected fall in inflation while the Fed maintains its hawkish stance. According to the FedWatch tool provided by CME Group, the forthcoming FOMC meeting will result in a rate hike of 0.25%, the same as it did last month. It’s to be noted that these odds are extremely dynamic and quick to adjust to changes in macro data such as the consumer price index.

Bitcoin’s Price To Break $30K?

It’s possible that Bitcoin may break above the $30,000 barrier, and if it does, the world’s largest cryptocurrency might continue to rise as it charts new territory. Yet, there is always the possibility of a market correction, which might result in a precipitous fall for the overall crypto market. The reaction of the U.S. stock market to the announcement will serve as an early warning signal.

As things stand, the price of BTC is currently exchanging hands at $28,459 which represents an increase of 2% over the past 24 hours as opposed to a gain of 1.41% recorded over the previous seven days. Additionally, it should be noted that BTC’s technical analysis (TA) indicators at CoinGape’s price tracker presently recommend a “buy” position, advising a “buy” at level 14 and a “sell” at level 2 by its moving averages.

Also Read: ApeCoin Might Turn Out To Be 2023’s Biggest Surprise; APE’s Price Poised For Rally?

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Pratik Bhuyan
CoinGape