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(Kitco News) - Crypto prices were on the rise Monday afternoon as investors prepared for a week focused on inflation, interest rates and second-quarter earnings.
Many are expecting the data to show that pressure on the economy is easing, which could translate into fewer interest rate hikes from the Federal Reserve, though the consensus is for a 25 bps hike in July.
Stocks edged higher ahead of this week's Consumer Price Index (CPI) report, with economists expecting a 3.1% increase for the year ended in June, which would be a cooldown from the 4% annual increase seen in May. At the close of markets, the S&P, Dow and Nasdaq all finished in the green, up 0.24%, 0.62%, and 0.18%, respectively.
Data provided by TradingView shows that Bitcoin (BTC) traded near the $30,300 support through the morning and early afternoon before a spike in trading volume pushed the top crypto to a daily high of $31,095. BTC has since pulled back to support at $30,900.
BTC/USD Chart by TradingView
According to Kitco senior technical analyst Jim Wyckoff, July Bitcoin futures price traded slightly higher in the early trading hours on Monday, and “The bulls still have the overall near-term technical advantage but need to step up and show some fresh power soon, to keep their edge.”
With all eyes now focused on the Federal Reserve and CPI, Greg Magadini, Director of Derivatives at Amberdata, said “The Fed’s June rate ‘skip’ is a ‘wait-and-see’ decision and CPI data is part of the picture they’re waiting to ‘see’.”
“We just received the latest employment data and although the job report only saw +209k and -110k (revision lower for April and May) the average hourly earning rose +4.4% y/y as June hours worked ticked higher and the unemployment rate dropped to 3.6% from 3.7%,” Magadini said. “This means that unless CPI has a surprisingly weak reading, the Fed is likely on-track to raise again in their July meeting.”
Based on Amberdata’s observations, the CPI release is unlikely to have much of an effect on Bitcoin and the crypto market as a 25 bps is widely expected and already priced in.
“Our base-case going into CPI is that it’s going to be a muted and subtle event,” he said. “Unless something truly surprising occurs BTC is going to be driven by spot ETF’s applications and regulatory developments more for now. Any surprise drop in CPI would be bullish for BTC prices otherwise, we view the next rate hike as larger priced-in.”
As for what to expect with BTC in the near-term, market analyst Rekt Capital pointed to the weekly chart and said it depends on how the token reacts to a retest of the $30,600 support/resistance level.
Very simple at this time
— Rekt Capital (@rektcapital) July 10, 2023
Lose the Higher Low --> #BTC could drop to ~$29300
Break ~$30600 --> $BTC could rally as high as ~$33000, maybe even ~$35000#Crypto #Bitcoin pic.twitter.com/FcRugtIPkw
Altcoins continue their upward climb
A majority of the altcoins in the top 200 traded in the green on Monday as the resilience of Bitcoin and its ability to hold above $30,000 continues to stoke bullish optimism from crypto traders.
Daily cryptocurrency market performance. Source: Coin360
Cartesi (CTSI) led the pack with an increase of 25.54% to trade at $0.19, followed by a 10.7% gain for Metal DAO (MTL) and a 9.73% increase for Stargate Finance (STG).
The overall cryptocurrency market cap now stands at $1.2 trillion, and Bitcoin’s dominance rate is 50.1%.
