New York: Bitcoin extended losses on Thursday, but held near a three-week high as investors looked ahead to a key U.S. inflation report for clues on the Federal Reserve’s interest rate outlook. The world’s largest cryptocurrency fell 1.3% to $102,422.5 by 02:02 ET (06:02 GMT), maintaining support above the crucial $100,000 level.
According to Azeri-Press News Agency, the cryptocurrency market saw increased risk appetite this week due to easing trade tensions between the U.S. and China. A joint statement on Monday by the two economic powerhouses to temporarily roll back tariffs helped alleviate fears of a global economic downturn. In addition, U.S. consumer price index data released Tuesday came in below expectations, reducing concerns over the inflationary effects of trade tariffs.
These developments have reinforced expectations of a potential Federal Reserve interest rate cut this year. However, caution persists amid concerns over a potential reacceleration in inflation due to ongoing tariff risks. Analysts have cautioned that the central bank is likely to prioritize controlling inflation and may wait for clear signs of economic deterioration before proceeding with rate cuts.
Markets turned cautious ahead of the upcoming U.S. Producer Price Index (PPI) data due later on Thursday, which is anticipated to provide further insights into inflation trends. As investors await these crucial indicators, the cryptocurrency market continues to navigate a complex landscape of trade dynamics and economic policy signals.