Bitcoin Braces for Volatility as Inflation Data Looms

Bitcoin Faces Potential Volatility Amid U.S. Inflation and Jobs Data Influence

Bitcoin (BTC) has been trading in a tight range between $100K and $105K since the Federal Reserve's (Fed) latest meeting, where it maintained interest rates amid "somewhat elevated" inflation. As the U.S. Personal Consumption Expenditure (PCE) price index report approaches, market participants are bracing for potential volatility in Bitcoin's price.

The PCE report, a key inflation indicator, is expected to influence future rate cut expectations and market performances. A cooler-than-expected inflation report could lift markets, while a hotter-than-expected data could tank BTC into the weekend. Key price levels to watch include $97.5K, $108K, and $110K, according to liquidation heatmaps.

In other developments, Tether announced plans to launch USDT minting on Bitcoin's base layer and layer 2 Lightning Network, powered by Taproot Assets. This update aims to enhance functionality and create practical solutions for remittances, payments, and other financial applications. Kraken has also resumed crypto staking services in the U.S. after a two-year hiatus, offering clients the opportunity to stake part of their tokens for a certain period and earn rewards minus fees.

Bitwise received the SEC's nod for its combined BTC and ETH ETF application, with anticipation growing for the subsequent approval of its registrant statement (S-1). Bloomberg ETF analyst James Seyffart noted positive movements in other similar applications, suggesting that products like those from Hashdex and Franklin Templeton may also be listed in the near term.

As the cryptocurrency market awaits key economic reports, the interplay between inflation data, regulatory changes, and macroeconomic trends remains critical to its trajectory. Both Bitcoin and Ethereum show resilience, yet their futures will be shaped by the Fed's policies and prevailing economic indicators. Investors should remain vigilant, monitoring these developments closely to navigate the evolving landscape.