On Wednesday, cryptocurrency prices were slightly higher following the release of an inflation report that was dismissed by investors.
Instead, they’re anxiously waiting for key inflation data that’s set to come out on Thursday. The top-ranking cryptocurrency, Bitcoin, edged at a higher price as it experienced gains of about 0.4 percent.
Consequently, it was trading at a price of $19,072. Meanwhile, the price of Ethereum increased by 0.6 percent as the price reached $1,290.
Today, the September producer price index, a measurement of final-demand wholesale prices, was found to be higher than what investors expected.
This gave them a hint that the Federal Reserve is nowhere near done implementing its harsh monetary policy involving higher interest rates until inflation is under control.
Investors Look Forward to Thursday’s Inflation Data
As of now, both equities and crypto investors are waiting for the consumer price index report set to release on Thursday.
According to Sylvia Jablonski, the chief investment officer and ECO of Defiance ETFs, the producer price index turned out to be ‘benign’ data that investors had no particular reaction towards – they weren’t enthusiastic, but they weren’t upset either.
Moreover, Bitcoin and the second-largest cryptocurrency Ether have been trading within a narrow range for almost a month.
As Bitcoin consolidates at the $19,000 level, investors’ future decisions are powered by macroeconomic changes. This comes as a result of the crypto sector quietly preparing for the upcoming bull run.
Crypto To Remain in Narrow Trading Range For Time Being
Earnings season usually takes place in the month following the end of a fiscal quarter, so until investors get past this season and the consumer price index data is set to release tomorrow, this could remain as they are.
Jablonski expects that until investors get a positive signal from the Federal Reserve, equities and cryptocurrencies could remain in a narrow trading range.
Moreover, much of investors’ funds, which usually go to the market, will end up staying on the sidelines.
She explains that it’s likely investors are reaching the end of the issue, but there’s no urgency for getting their funds because of the uncertainty that will prevail in the short term.
Until the crypto sector makes it to the other side, growth assets will remain almost stagnant.
Federal Reserve Could Reduce Pressure on Crypto
One of the events that could give risky assets like crypto a boost is that the Federal Reserve brings an end to its aggressive monetary policy.
Each time they increase interest rates, it’s more difficult for people with debt to make repayments. If interest rates are too high and for long periods of time, mortgage holders can default on their payments.