The price of Bitcoin remained relatively stable on Friday despite growing concerns over higher U.S. interest rates. Over the past 24 hours, Bitcoin saw a minor increase of 0.2% to reach $64,339.7. This came at a time when investors were anticipating the release of U.S. inflation data, which could have a significant impact on market sentiment. Despite this, Bitcoin’s performance for the week was lackluster, as it continued to trade within a range of $60,000 to $70,000 that has been established over the past six weeks.
One of the factors that contributed to the subdued sentiment towards crypto markets was the fear of increased regulatory scrutiny. Reports emerged this week suggesting that U.S. prosecutors were seeking a lengthy prison sentence for Changpeng Zhao, the founder of Binance, for violating anti-money laundering laws. This news, combined with the ongoing regulatory pressure on cryptocurrencies, dampened the enthusiasm of investors in the crypto space.
The release of weaker-than-expected U.S. gross domestic product data led to a decline in the value of the dollar, which typically benefits Bitcoin and other cryptocurrencies. However, the positive effect was short-lived as traders adjusted their expectations for interest rate cuts by the Federal Reserve. The stronger GDP price index reading prompted traders to push back the timeline for potential rate cuts, signaling a prolonged period of higher U.S. interest rates.
Market Response to U.S. Technology Stocks and Broader Crypto Market Trends
Despite the positive performance of U.S. technology stocks, including strong earnings from tech giants like Microsoft and Alphabet, Bitcoin failed to capitalize on these developments. The correlation between Bitcoin and U.S. tech stocks, which had shown signs of resurgence in recent weeks, did not translate into significant gains for the cryptocurrency. This lackluster performance was mirrored in the broader crypto market, with Ethereum, XRP, and Solana either experiencing marginal declines or moving within a narrow range.
As investors await the release of the PCE price index data for March, which is the Federal Reserve’s preferred inflation gauge, there is a sense of anticipation regarding its impact on interest rate decisions. The upcoming data is expected to provide further insight into the central bank’s outlook on interest rates, which could have ripple effects on the cryptocurrency market. Traders are closely monitoring these developments to gauge the future trajectory of Bitcoin and other digital assets in the face of evolving market conditions.