Bitcoin has remained relatively stable for the second day in a row, parked in the mid-$27,000 range as investors remain cautious ahead of the upcoming US inflation report on Wednesday.
The world's largest cryptocurrency by market capitalisation (BTC-USD) saw a slight 0.2% decrease in the last 24 hours, with its value standing at approximately $27,561, as of the time of writing.
Ether (ETH-USD), the second-largest cryptocurrency, experienced a slight decline of around 0.1% in the past 24 hours, trading at approximately $1,840.
The inflow suggests investors are moving digital assets onto exchanges and poised to sell, in case of further downward price movement.
Read more: Crypto live prices
Investor eyes will be on Wednesday's release of Consumer Price Index (CPI) inflation data from the US Bureau of Labor Statistics, which will influence upcoming Federal Reserve interest rate decisions.
Whilst annual CPI inflation in the US is forecast to stay unchanged at 5% in April, core CPI, which excludes volatile food and energy prices, is expected to rise 0.3% month-on-month.
The US CPI data will hold the utmost relevance for any future Federal Reserve decision on interest rates.
After the last meeting of the Federal Open Market Committee (FOMC) on May 3, the US central bank made it clear that “it will take a data dependent approach to determine the extent of further rate hikes” as elevated inflation levels and the banking sector stress remain in focus.
Any increase in interest rates will have a knock-on effect on bitcoin. The digital asset habitually falls into lockstep with US equities, and by end of trade on Tuesday the Dow Jones (^DJI) fell 0.25% to 33,534.66 points, while the S&P 500 (^GSPC) declined 0.43% to 4,120.32 points. The tech-heavy NASDAQ (^IXIC) also dropped by 0.48% to 12,200.57.
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