Bitcoin trades at $27.5K

Bitcoin (BTC) remained stagnant around mid-$27,000 on Tuesday as investors awaited the latest US inflation report on Wednesday. According to CoinDesk data, the largest cryptocurrency by market capitalisation was recently trading at around $27,560, down 0.2% in the past 24 hours.

Market watchers are focusing on “Binance and whether people are seriously storing cryptos in cold wallets,” said Edward Moya, senior market analyst for foreign exchange Oanda, in a Tuesday note. He suggested that investors will be keeping an eye on Bitcoin’s trading range and warned that “if we have a de-risking moment on Wall Street, that will be enough to send cryptos towards the lows seen in mid-March.”

On the other hand, Ether (ETH), the second-largest cryptocurrency, changed hands at around $1,844, down roughly 0.4% on Tuesday. Among other digital assets, Bitcoin Cash’s BCH rose over 9% to trade at around $121.29, while Lido’s governance token LDO recently increased by 6% to $1.85. The CoinDesk Market Index (CMI), which measures the overall crypto market performance, was up roughly half a percentage point for the day.

The US Consumer Price Index (CPI) for April is due on Wednesday and investors will be watching closely for clues about how the US Federal Reserve will act at its next policy meeting in June. The Fed approved a 25 basis points (bps) increase earlier this month to push the Federal Funds rate to its highest level in 16 years. Investors will be keeping a close eye on the CPI for hints on how the Fed will respond to inflation, with many anticipating a more dovish policy shift.

Mark Connors, head of research for Canadian crypto asset manager 3iQ, held the Fed accountable for the recent banking crisis and called the institution “both arsonist and firefighter by design.” In an interview with CoinDesk, Connors said the Fed wants to reduce the footprint of banks while consolidating it because they have lost control of financial stability due to foreign reliance, debt-to-GDP, and now inflation. He believes the Fed will eventually pivot to a more dovish policy.