Bitcoin, Ethereum, and Dogecoin Experience Slight Increases After May CPI Data
Bitcoin shows signs of optimism despite SEC lawsuits and stagnant price.
Bitcoin briefly showed signs of optimism as reflected in the May Consumer Price Index (CPI) released on Tuesday, which demonstrated a decline in inflation. Despite ongoing Securities and Exchange Commission (SEC) lawsuits against major crypto exchanges Binance and Coinbase, investors remained hopeful and awaited the outcome of the latest inflation report and the Federal Reserve interest rate decision on Wednesday. However, BTC has remained relatively stagnant below $26,000 over the past four days.
At the time of writing, the global crypto market capitalization stood at $1.06 trillion, showing a slight increase of 0.30% over the last day. Stocks soared on Tuesday following the release of the latest inflation data, which revealed a decline in price pressures in May. This positive news led investors to believe that the Federal Reserve may hold off on interest rate hikes, resulting in strong gains for the S&P 500 and the Nasdaq Composite. Both indices closed at their highest levels since April 2022, with the Nasdaq Composite reaching fresh 13-month highs during the session.
Despite the positive market sentiment in stocks, the news did not significantly boost the crypto market. Many traders are concerned about the stability of altcoins and the potential classification of key blockchain protocol cryptos as securities. Edward Moya, Senior Market Analyst at OANDA, stated that this regulatory uncertainty could dampen interest in crypto in the US.
Crypto analyst Michael Van de Poppe predicts a market drop leading up to the Federal Open Market Committee (FOMC) meeting, but sees a potential trading opportunity in the range of $24,500 to $25,000. He believes this could be a lucrative area for investors looking to enter long positions.
Chris Burniske, a partner at venture capital firm Placeholder, addressed concerns about the future of crypto and acknowledged that doubts are natural within market cycles. However, he believes that these doubts are necessary for the industry to experience significant gains in the long run. Burniske emphasizes that the consensus belief in crypto's future does not result in exponential growth, but rather it is the doubt and uncertainty that drive multiples and astonish investors.
On-chain analytics platform Santiment reported that the exchange supply of Bitcoin has reached its lowest level since February 2018. This trend is attributed to traders moving their BTC holdings to self-custody wallets amidst the current uncertainty surrounding Binance and Coinbase. As the SEC lawsuits continue, it is likely that this shift towards self-custody will persist.
Overall, while the latest inflation data brought some optimism to the crypto market, concerns about regulatory issues and the future of altcoins remain. Traders are closely watching the Federal Reserve's interest rate decision and the outcome of the SEC lawsuits against Binance and Coinbase for further market direction.