Following the release of the most recent Consumer Price Index (CPI) report, which indicated a slight but less-than-expected slowdown in inflation, Bitcoin (BTC) hung precariously around $30,000 on Wednesday afternoon.
According to data from CoinDesk, the most valuable cryptocurrency as measured by market capitalization most recently traded at $30,030, a decrease of a few thousandths of a percent over the previous 24 hours. In the early hours of Wednesday, the price of BTC climbed as high as $30,548 after the generally regarded Bureau of Labor Statistics inflation gauge revealed that the CPI increased by 0.1% in March, less quickly than the 0.2% and 0.4% forecasts of economists. The CPI was up 5% on an annual basis, up from 6% in February, and exceeding predictions of 5.2%.
BTC’s profit-taking “intensifies” following the report, Edward Moya, a senior market analyst at foreign exchange Oanda, wrote in a note on Wednesday.
“It appears that the momentum rally for bitcoin may be over for now,” Moya wrote. “The inflation hedge and/or a break in its correlation with stocks could wear off for a while.” He added that BTC seems poised to consolidate as “it clearly needs a robust catalyst to keep the rally going.”
Ether (ETH), the second largest cryptocurrency by market value, recently traded at $1,914, up 0.3% from the same time Tuesday. Validators and market watchers are eyeing Ethereum’s Shanghai (or Shapella) upgrade, which is set to go live at 18:27 ET (22:27 UTC).
Crypto analysts and traders are divided on the impact of the event on the market, with some expecting ETH selling pressure to push the token’s price lower, while others anticipate little impact on the price.
“While there are many short-term concerns about what happens once staked ETH is unlocked, in the long-term the ability to hop in and out at will opens the doors for new entrants who may have balked at locking their funds indefinitely Jim Myers, founder and chief technology officer of blockchain analytics platform Flipside Crypto, told CoinDesk in an email.
BTC and ETH are up more than 6% and 4%, respectively, over the past seven days. The CoinDesk Market Index (CMI), which measures the overall performance of the crypto market, is down 0.2% on the day but is up 2.2% over the past seven days.
Stock markets were mixed on Wednesday afternoon. The S&P 500 and Dow Jones Industrial Average (DJIA) were recently up 0.3% and 0.5%, respectively. The tech-heavy Nasdaq was nearly flat.
