Bitcoin price steadies ahead of U.S. CPI report

13 Jul 2021

The price of Bitcoin steadied on Tuesday after recording a 3.41% loss at the close of the previous session.

The spot BTC/USD exchange rate increased by 1.31% to $33,096 after a drop to $32,996 on Monday on the Coinbase exchange.

In addition, the CME Bitcoin Futures rose 1.64% from the prior session’s low of $32,600, Cointelegraph reports.

During a week of key inflation reports and a congressional testimony from Fed Chairman Jerome Powell, Bitcoin and the dollar moved inversely.

Another rise in the U.S. Consumer-Price Index (CPI) in June is due to be unveiled on Tuesday as the economy attempts to rally from the pandemic-induced slowdown.

According to a Reuters poll of economists, the CPI may have risen by 0.5% from May and 4.9% from last year.

Since March 2020, the U.S. Federal Reserve has been operating a $120 billion monthly asset purchase program, whilst simultaneously keeping the benchmark lending rate close to zero. 

As such, the Fed’s policies have doubled its balance sheet to surpass $8 trillion. At the same time, Bitcoin has spiked by up to 1,528%—from $3,858 to almost $65,000, the Cointelegraph report goes on to add.

However, Bitcoin – the world’s largest cryptocurrency by market cap – has fallen by more than half since the record high in April, but held on to the $30,000 mark as its price floor.

"The uptick in the CPI readings is an indication that the economy has not healed completely from the pangs of the pandemic, and the crypto market is trailing the negative inflation figures," said Gustavo De La Torre, director of business development at N.exchange. He added that a fall in Bitcoin prices together with a mixed economic outlook would lead additional investors to buy the cryptocurrency.

"Should the buyup intensify, a price push up to $40,000 for Bitcoin may be seen in the short term," he added.