The cryptocurrency continued to hover just below $110K on Wednesday morning even as positive market data buoyed stock markets, before dipping below $109K later in the afternoon.
Bitcoin Trades Sideways Despite Positive Inflation Data and Successful US-China Trade Deal
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BTC Holds Steady as Inflation Eases and US-China Trade Deal Boosts Market Sentiment
A victory lap may be in the cards for the Trump administration as it successfully negotiated a trade deal with China after a series of high stakes meetings across the pond in London. Back home, the U.S. Bureau of Labor Statistics revealed lower than expected inflation numbers for the month of May. Stock markets soared on the news, but bitcoin held steady just below $110K, even dipping below $109K later in the afternoon.
The consumer price index (CPI) increased by 0.1% in May, slightly bumping up annual inflation to 2.4%. Economists at data analysis firm Factset, had predicted a 0.2% increase to 2.5% on Tuesday. The S&P 500, Nasdaq, and Dow all climbed 0.17%, 0.10%, and 0.49% respectively, according to data from CNBC.
The promising economic data flies in the face of caution from experts who warned of runaway inflation as a consequence of U.S. President Donald Trump’s unprecedented tariff policies. But while Trump celebrated today’s CPI data and touted his negotiating chops after finalizing a US-China trade deal that will see a 55% tariff on Chinese imports and a 10% import tax on American products entering China, bitcoin barely budged.
“Our deal with China is done, subject to final approval with President Xi and me,” Trump posted on Truth Social in all caps. “CPI just out. Great numbers! Fed should lower one full point,” the president later added, calling out Federal Reserve Chairman Jerome Powell. The central bank will meet next week to decide on the country’s interest rate policy.
Overview of Market Metrics
Bitcoin was trading at $108,673 at the time of reporting, holding steady early in the morning before dipping later in the afternoon. BTC’s price shed 0.17% since yesterday but has increased 3.36% over the past week. Coinmarketcap shows that the cryptocurrency moved within a 24-hour range of $108,558.63 to $110,384.22. BTC’s total market capitalization moved slightly higher to $2.16 trillion, up 0.36% from the previous day.
Despite the stable price action, trading volume slipped to $50.47 billion, down 12.35% over the same period, suggesting some traders are sitting on the sidelines. Bitcoin dominance also edged lower to 63.87%, a 0.33% dip, perhaps due to potential capital moving into altcoins. Meanwhile, futures market sentiment remained cautiously bullish, with open interest rising 0.65% to $75.52 billion according to Coinglass.
However, some bullish traders may have been a little overeager. Coinglass data shows total liquidations over the past 24 hours hit $3.19 million, with $3.15 million of that coming from long positions. Short liquidations amounted to just $45,170.
