Bitcoin Rises Ahead of Inflation Data. Could This Be the Push to $32,000?

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Bitcoin
and other cryptocurrencies rose Wednesday as investors awaited the release of key inflation data that could influence the Federal Reserve’s next moves on interest rates.

The price of

Bitcoin
has gained less than 1% over the past 24 hours to $30,750, on the upper end of a trading range between $30,000 and $31,000 that has dominated for weeks now. The largest digital asset just notched its best first six months of a year since 2019, but recently has been stagnating and unable to reclaim April’s high of $31,500—though traders are hoping that could soon change with the right catalyst.

“Bitcoin is gaining momentum,” said Alex Kuptsikevich, an analyst at broker FxPro. “Bitcoin is up at $30,800 and is approaching the upper boundary of its short-term range at $31,400. Only a break above this level will indicate that the market is ready for further gains, with potential targets near $35,500 by the end of the month.”

The next major catalyst will come Wednesday with the release of the U.S. consumer-price index for June, which is as likely to move Bitcoin as the

Dow Jones Industrial Average
and

S&P 500.
This critical measure of inflation is being closely watched by investors at a time of shifting expectations over the Federal Reserve’s next moves on interest rates. While another rate hike is all but priced in for July, the latest inflation print could solidify expectations for what comes after that—whether the Fed is finished raising rates in its battle against inflation or if more increases are ahead.

Since the Fed’s campaign of rate hikes that began in March 2022—the most aggressive tightening cycle in a generation—was a major headwind for risk-sensitive assets like stocks and cryptos, the outlook for inflation and rates remains key.

“We likely need more evidence of downward movement in core inflation before Bitcoin can really take off,” said Antoni Trenchev, co-founder and managing partner at crypto lender Nexo. “Investors will be hoping Bitcoin’s price mirrors its ascent in the wake of the June 13 inflation report when it closed below $26,000 before launching itself to a 13-month high of $31,500.”

Beyond Bitcoin,

Ether
—the second-largest crypto—rose 1% to $1,890. Smaller cryptos or altcoins were more muted, with

Cardano
up less than 1% and

Polygon
slipping less than 1%. It was more of the same with memecoins, as

Dogecoin
traded just above flat and

Shiba Inu
shed less than 1%.

Write to Jack Denton at jack.denton@barrons.com