Bitcoin BTC
-2.20%
It fell below the $69,000 level on Wednesday ahead of the release of US inflation data.
The U.S. Bureau of Labor Statistics is scheduled to release March 2024 Consumer Price Index (CPI) data later today. Inflation in March is expected to rise at an annual rate of 3.4%, which would be faster than the 3.2% increase recorded in February.
However, if the data shows weak inflation figures in March, this could impact the likelihood of a rate cut by the US Federal Reserve in the first half of 2024.
According to CME’s FedWatch tool, interest rate traders are 93.7% confident the Fed will keep interest rates steady in May. However, the market currently predicts a 50.8% chance of an interest rate cut at the Federal Open Market Committee in June.
Stock futures rise ahead of CPI numbers
Stock futures rose slightly on Wednesday morning ahead of important US inflation data. Futures linked to the Dow Jones Industrial Average rose 44 points, up 0.1% in early morning trading.
Additionally, the S&P 500 closed slightly higher on Tuesday, up 0.13%, while the Nasdaq closed yesterday’s trading up 0.32%.
Bitcoin closely tracks risk asset trends typically observed in indices such as Nasdaq and S&P 500. However, over the past 24 hours, digital assets have performed against this trend.
March employment indicator stronger than expected
The inflation figures come after the U.S. Department of Labor released employment figures for March on Friday. Data shows U.S. employers added 303,000 jobs, exceeding expectations and indicating the labor market remains strong despite high interest rates.
This figure was much stronger than the 200,000 job gains economists had expected. Strong employment data and resilient economic activity will likely allow the Fed to keep rates unchanged for a longer period of time.
Low unemployment and strong job growth could lead to upward pressure on wages and prices, potentially contributing to inflation. In such a scenario, the Fed may be more inclined to consider keeping interest rates steady rather than cutting them to prevent the economy from overheating.
The largest digital asset by market cap is down about 2% over the past 24 hours, trading at $68,966 at 5:50 a.m. ET, according to The Block’s pricing page. The GM 30 index, which represents the top 30 cryptocurrencies, fell 2.97% to 146.95 over the past 24 hours.
Bitcoin fell below $68,000 on Wednesday. Image: Block.
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