Bitcoin
and other cryptocurrencies slipped on Thursday, continuing to trade in a range that has dominated for weeks but exhibiting a trend in price action that may signal more gains ahead.
The price of
Bitcoin
has fallen less than 1% over the past 24 hours to $30,500. Bitcoin has fallen back since the largest digital asset spiked to near $31,000 in Wednesday trading after the release of the consumer-price index for June showed that U.S. inflation is cooling. April’s high around $31,500 remains out of reach now, though the psychologically important $30,000 level is secure.
“Bitcoin was very choppy around the inflation release yesterday but ultimately it’s had little sustainable impact on the price,” said Craig Erlam, an analyst at broker Oanda. “It’s … still well within the $30,000-$31,000 range it has broadly traded in for the last few weeks. That consolidation will probably come more as comfort to crypto bulls but at this stage, it isn’t particularly clear in which direction it will break next.”
Indeed, Bitcoin rose alongside the
Dow Jones Industrial Average
and
S&P 500
after the inflation data, which suggested that the Federal Reserve may not have to raise interest rates much more and could begin cutting rates early next year. The breakneck rise in rates since March 2022—amid the highest inflation in a generation—was a key pressure for stocks and cryptos so a more accommodative Fed would be a tailwind.
The CPI release, however, failed to be the catalyst that crypto bulls might have hoped for as rangebound trading persists. But the price action in Bitcoin may actually be a positive sign—an indicator that markets are bracing for the next bullish surge.
“Bitcoin is currently consolidating below the 2021-22 cycle mid-point of $30,000, with several metrics reaching a level of equilibrium and balance. This is synonymous with the ‘re-accumulation period’ seen in past cycles, characterized as several months with little macro direction,” analysts at crypto market intelligence firm Glassnode wrote in a recent note.
These re-accumulation periods, in which traders are buying Bitcoin ahead of the next expected bull run, sees price action in which tokens trade sideways and are volatile for several months, according to Glassnode. “With the market back at this equilibrium point, it remains to be seen if a similar lengthy and choppy process is needed to overcome it,” the analysts said.
Beyond Bitcoin,
Ether
—the second-largest crypto—lost less than 1% to $1,875. Smaller cryptos or altcoins were weaker, with
Cardano
down 2% and
Polygon
retreating 1%. Memecoins were muted, with
Dogecoin
and
Shiba Inu
shedding less than 1% each.
Write to Jack Denton at [email protected]
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