Bitcoin
and other cryptocurrencies were rising Friday as investors looked ahead to key U.S. inflation data, with crypto traders skewing bullish and betting on digital asset prices continuing to rise.
The price of
Bitcoin
has climbed more than 1% over the past 24 hours to near $30,800, approaching its recent peak above $31,000, which represents Bitcoin’s highest level since last June. The largest digital asset has rallied some 85% in the first half of 2023—a remarkable performance after cryptos finished last year deeply depressed after the shock bankruptcy of exchange FTX.
“Bitcoin’s comparative performance against the wider crypto market strengthened, with no signs of reversal,” said Rachel Lin, CEO of trading platform SynFutures.
The day ahead holds a possible catalyst for more gains—or a reversal. Like the
Dow Jones Industrial Average
and
S&P 500,
Bitcoin is set to move on the back of the U.S. core personal-consumption expenditures (PCE) index, the Federal Reserve’s preferred measure of inflation, due at 8:30 a.m. Eastern time.
Expectations that the Fed, which has raised interest rates aggressively since March 2022 in a bid to control decades-high inflation will soon stop tightening financial conditions has been a tailwind for Bitcoin. The PCE data could confirm whether the central bank is likely to be more accommodative on monetary policy, or, if inflation remains hot, more poised to hike rates further, dampening demand for risk assets.
In the meantime, crypto traders remain bullish, piling into derivatives positions betting on a continued rise in prices.
“Derivatives data shows increased trading activity,” Lin noted. “Options open interest indicates 66% calls to 34% puts, with the most significant interest at the $35,000 and $32,000 call levels, acting as resistance if Bitcoin breaks the $30,000 level.”
Calls are bets that prices will increase, so a skew toward calls as opposed to puts—wagers on a fall in prices—is a sign of bullish sentiment among traders.
Beyond Bitcoin,
Ether
—the second-largest crypto—rose 1.5% to $1,885. Smaller cryptos, or altcoins, were even more buoyant, with
Cardano
climbing 5% and
Polygon
popping 6%. Memecoins exhibited more of the same, with
Dogecoin
and
Shiba Inu
each up 4%.
Write to Jack Denton at [email protected]
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