Bitcoin Stuck in $62,000-$66,000 Range: US Inflation Could Trigger Breakout
As Bitcoin remains squeezed between ETF inflows and selling pressure from miners and institutional investors, US inflation data could provide the catalyst to break out of the narrow range it has held for weeks.
On Tuesday, Bitcoin traded sideways at $64,014.33, maintaining the stagnant outlook that has persisted for nearly five weeks. Although the largest cryptocurrency dipped 0.6% in the last 24 hours to around $63,500, it failed to escape the $62,000-$66,000 band that has been dominant throughout the summer.
Paul Howard, a senior executive at trading firm Wincent, stated that price movements are largely driven by ETF inflows being offset by over-the-counter (OTC) sales from miners and companies like Strategy. Cryptocurrency market trading volumes falling to their lowest level in three years has also made it difficult for Bitcoin to move in a definitive direction.
US Inflation Data Could Stir Bitcoin Price
Bitfinex analysts noted that ETFs and companies holding Bitcoin on their balance sheets are two significant sources of demand with low price sensitivity. However, sales from institutional treasuries have balanced this demand. This explains why Bitcoin rose only 2% last week, despite strong ETF inflows and positive performance across general risk markets.
The market’s primary focus for potential volatility has shifted to Wednesday’s US Consumer Price Index (CPI) data. Jeff Anderson, an executive at STS Digital, expressed that low summer liquidity means buyers and sellers lack strong conviction, and volatility expectations have dropped due to uncertainties surrounding monetary policy and the Digital Asset Market Clarity Act.
While it is noted that a larger price movement could occur if Bitcoin breaks out of its current range, Howard believes the sideways trend could persist until mid-September unless a fundamental catalyst emerges. Positions in the derivatives markets show that investors are still balancing their risks. According to CoinGlass data, Bitcoin has lost an average of 4% in value during the month of September since 2013.