Cryptocurrencies Show Slight Gains Ahead of Inflation Data Release

July 12, 2023: Major cryptocurrencies are trading slightly higher as investors eagerly await the Consumer Price Index (CPI) release on Wednesday. This upcoming release, which marks the first significant inflation data since mid-June, has the potential to determine the future trading pattern.

Bitcoin has had a strong year, with prices surging by 84% year to date. However, a closer look at the month-to-month data reveals that most gains were consolidated during winter. Specifically, January and March had average daily returns of 1.11% and 0.73%, respectively. June also performed well, with an average daily gain of 0.41%, primarily driven by BlackRock’s spot ETF announcement. On the other hand, February and April were relatively stagnant for Bitcoin, and May was the only month with negative returns this year.

The global crypto market capitalization currently stands at $1.19 trillion, showing a 0.19% increase in the last day.

U.S. stocks rebounded on Tuesday after a three-session decline, with the S&P 500 recording a 0.67% increase and the Nasdaq Composite, which focuses on technology stocks, gaining 0.55%.

According to crypto trader Michael Van de Poppe, the current phase for other cryptocurrencies is facing depression, indicating that the best opportunities to accumulate positions lie before the market starts rallying into the bull. More institutional adoption and the introduction of ETFs are expected to play a role in this trend.

Pseudonymous trader Dontells suggests that Ethereum’s current consolidation phase at its current prices could potentially lead to a breakout. Although there have been a few instances of resistance, it has not significantly impacted. Dontells emphasizes that Bitcoin should move soon, or it may face negative consequences. If Ethereum rises above $1,935, it could trigger a rapid rally, potentially reaching a level last seen in May 2022.

As investors await the CPI release, they closely monitor inflation data, which plays a significant role in market trends. Inflation refers to the increase in the prices of goods and services over time. The Federal Reserve evaluates changes in inflation by monitoring various price indexes, such as the price index for personal consumption expenditures (PCE) and consumer price indexes. These indexes provide insights into the overall price level changes of the economy’s goods and services.

In conclusion, cryptocurrencies are showing slight gains ahead of the inflation data release, which is expected to impact their trading patterns. Bitcoin has had a strong year but experienced consolidation during certain months. Ethereum’s current consolidation phase could lead to a breakout, while the resistance it faces may trigger a downward movement. Investors eagerly await the CPI release as inflation data plays a crucial role in market trends.