Bitcoin price experienced minimal movement on Thursday following a volatile session. Despite some signs of cooling near-term inflation, the forecast from the Federal Reserve of high interest rates for a longer period overshadowed any positive developments. The world’s largest cryptocurrency managed to increase by 0.4% in the past 24 hours, reaching $67,484.6 by 02:05 ET (06:05 GMT). However, the token exhibited wild swings throughout the week, surging to $70,000 before experiencing a sharp decline.
The Federal Reserve decided to keep rates unchanged on Wednesday as anticipated. Nonetheless, Chair Jerome Powell’s statement regarding the possibility of only one rate cut this year, rather than the previously expected three cuts, raised concerns among traders. Several policymakers emphasized that no rate cuts should be implemented this year, stressing the need for more progress in reducing inflation. Furthermore, the Fed revised its inflation forecast for the year.
Following the slight ease in U.S. consumer inflation in May, Bitcoin witnessed some gains. However, these gains were short-lived as the Fed’s comments regarding high interest rates deterred investors. High rates are generally unfavorable for speculative assets like cryptocurrencies, as they restrict the available liquidity for investing in this sector. Even though institutional investors continued to inject funds into crypto, this positive trend did not substantially impact token prices.
Further insights on U.S. inflation are expected from the upcoming release of the producer price index inflation data. This data will provide additional cues about the inflationary pressure in the United States. The outlook for high interest rates in the U.S. also had a negative effect on the prices of other cryptocurrencies. For instance, the second-largest token, Ether, dropped by 0.3% to $3,499.09, erasing some of its previous gains.
Altcoins like ADA, XRP, and SOL saw marginal increases ranging between 0.6% and 1.7%, although their performance for the week remained negative. In contrast, meme tokens exhibited mixed results, with SHIB decreasing by 1.6% while DOGE rose by 3%. However, the sentiment towards meme tokens seemed to be declining, mirroring the waning interest in meme stocks on Wall Street.