The largest digital asset by market cap has fallen below the $62,000 mark, having declined 1.6% in the past 24 hours to trade at $61,731 at 10:10 a.m. ET, according to The Block’s Price Page. According to the U.S. Bureau of Labor Statistics on Tuesday, the Producer Price Index rose 0.5% in April. Economists had forecast a smaller 0.3% increase in PPI.Traders will closely monitor Tuesday's PPI and Wednesday's Consumer Price Index for clues regarding interest rates.
This week's hotter inflation data could provide insight into how the Federal Reserve might shape its monetary policy decisions in upcoming Federal Open Market Committee meetings. The higher-than-expected wholesale inflation reading could add pressure on the U.S. central bank to maintain higher interest rates for a longer period, a scenario that would discourage investment in risk assets such as bitcoin.After Tuesday's PPI print, the CME's FedWatch tool now forecasts a 29.2% chance of a rate cut at July's FOMC meeting and a 48.9% chance at September's meeting. Interest traders forecast a 91.3% chance that rates will remain unchanged at June's meeting.
"The FOMC has defined the bar to begin loosening monetary conditions as three consecutive softer inflation prints, we would expect a market response to any surprise beat or miss this week. Additionally, Powell is due to speak tomorrow which will be watched closely for additional policy hints," Wintermute OTC Trading Desk analysts said in an email sent to The Block.
The GM 30 Index, representing a selection of the top 30 cryptocurrencies, fell 2.18% to 126.96 in the same period.Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures.