Crypto Falls Ahead of US Inflation Figure as Bitcoin On-Chain Metrics Signal ‘Oversold Conditions’
The crypto market fell on Tuesday ahead of a US inflation report for June that is feared to show that consumer prices have continued to rise at a faster pace despite interest rate hikes. Meanwhile, more on-chain signs are now indicating that a bottom for bitcoin (BTC) could be about to form.
As of Tuesday at 11:20 UTC, bitcoin stood at USD 19,672, down 4% for the day and 3% for the week, after falling below the key USD 20,000 level in early European trading. At the same time, ethereum (ETH) traded at USD 1,065, down 7% for the day and 8% for the week.
The moves happened ahead of the release of June inflation figures in the US on Wednesday, with expectations being that inflation will have increased even further from 8.6% annually in May.
Fears that inflation will come in higher increased on Monday, when White House spokesperson Karine Jean-Pierre said she expects inflation to be “highly elevated.” According to a Bloomberg estimate, the headline inflation number for June is expected to come in at 8.8% annually.
“Bitcoin remains in a tight trading range,” which has “left traders scratching their heads as to when the next meaningful move to the upside or downside will be in the largest cryptocurrency,” Nick Heale, Head of Corporate Advisory at crypto broker GlobalBlock, wrote in an emailed commentary on Tuesday.
Heale further said that the week will be “crucial” for all financial markets with inflation numbers coming out on Wednesday. “Bulls will be hoping for some relief in the measure, due to evidence that commodity prices could finally be coming down,” Heale said, warning that “this may take some time to play out.”
Meanwhile, new data from the crypto research and investment firm CoinShares showed that flows into short-bitcoin
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