Bitcoin (BTC) hung precariously around $30,000 on Wednesday afternoon after the latest Consumer Price Index (CPI) report showed a slight slowdown in inflation, but not as much as economists had expected.
The top cryptocurrency by market cap recently traded at $30,030, which is down a few fractions of a percentage point over the past 24 hours, according to data from CoinDesk. BTC’s price reached as high as $30,548 earlier Wednesday after the widely followed Bureau of Labor Statistics inflation gauge showed the CPI rose 0.1% in March, slower than economists’ 0.2% forecast the month and the 0.4% forecast in February. On a yearly basis, CPI was up 5%, up from 6% in February and beating expectations 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 market impact of the event, with some expecting ETH selling pressure to push the token’s price lower, but others anticipating little notable 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 the Dow Jones Industrial Average (DJIA) were recently up 0.3% and 0.5%, respectively. The tech-heavy Nasdaq was nearly flat.
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