Crypto Market Sentiment Grim Ahead Of U.S. CPI Data
Sentiment remained muted in crypto markets amidst an anxious wait for the release of CPI numbers from the U.S. Mood has been subdued across asset classes as markets speculate on the potential upside risks to inflation that could jeopardize the Fed’s plans to pause its rate hiking cycle.
The U.S. Bureau of Labor Statistics is set to release the consumer price inflation readings for the month of April at 8.30 AM ET. Markets expect the headline inflation to be steady at 5 percent whereas core inflation is seen edging down from 5.6 percent to 5.5 percent. The strong jobs data released on Friday revealed a resilient labor market and markets are nervous whether the inflations readings too would point to stubborn price pressures in the economy.
Though the Fed has assured to take cognizance of the cumulative monetary tightening, any indication of a persistent inflation is bound to prevent the Fed from easing its tightening approach.
The anxiety surrounding the inflation readings and the uncertainty regarding the monetary policy reflected in increased expectations of rate hike in the next monetary policy outcome to be announced on June 14.
The CME FedWatch Tool currently shows a 25.8 percent probability for a 25 basis points hike, a 74.2 percent probability for a pause and a zero percent likelihood for a cut in the next review. Expectations of a quarter point hike increased from 21.2 percent a day earlier, 16.3 percent a week earlier and 3.6 percent a month earlier.
Amidst rate hike uncertainty, the Dollar Index which measures the strength of the Dollar’s strength against a basket of 6 currencies increased 0.15 percent overnight to 101.76. Gold, a competing safe haven asset also dropped around 0.35 percent overnight to trade at $2035 per troy ounce.
European benchmarks are trading lower. Wall Street Futures are also trading in the red zone. Asian stocks finished trading on a negative note.
Overall crypto market capitalization is steady at $1.14 trillion.
Bitcoin (BTC) which dominates 46.9 percent of the overall crypto market traded between $27,824.39 and $27,375.60 in the past 24 hours. BTC is currently changing hands at $27,722.43, edging down 0.04 percent on an overnight basis and 2.8 percent on a weekly basis.
Ethereum which commands a crypto market share of 19.5 percent is currently trading at $1,853.85, gaining 0.32 percent in the past 24 hours. The leading alternate coin has shed 0.23 percent over the past seven days. Trading ranged between $1,860.67 and $1,835.70 in the past 24 hours.
89th ranked Kava (KAVA) topped with overnight gains of more than 13 percent. The cryptocurrency tagged to the DeFi category has gained close to 13 percent in the past week.
77th ranked Terra Classic (LUNC) gained more than 5 percent in the past 24 hours amidst a major upgradation proposal. The mainnet upgrade is scheduled for May 17. However, the crypto is still making losses of more than 13 percent over the past seven days.
57th ranked Pepe (PEPE) which tops the price charts on a weekly basis with a surge of 112 percent has lost 6.4 percent overnight.
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