Bitcoin price drops below $69,000 ahead of US inflation reading

Bitcoin BTC -2.37% has fallen below the $69,000 level on Wednesday, ahead of the release of U.S. inflation data.

The U.S. Bureau of Labor Statistics is set to release March 2024 Consumer Price Index, CPI, data later today. Inflation is forecast to rise at an annual pace of 3.4% in March, this would be at a faster pace than the 3.2% increase recorded in February.

However, if the data shows a soft inflation reading for the month of March, this could influence the potential for a rate cut by the U.S. Federal Reserve in the first half of 2024. 

According to the  CME's FedWatch tool , interest rate traders are 93.7% certain that the Fed will hold rates steady in May. However, the market now expects the chance of a rate cut at the June Federal Open Market Committee meeting to be 50.8%. 

Stock futures rise ahead of CPI reading

Stock futures rose marginally on Wednesday morning ahead of the critical U.S. inflation data. Futures tied to the Dow Jones Industrial Average rose by 44 points, representing a 0.1% increase in early morning trading.

Additionally, the SP 500 closed slightly higher on Tuesday, with a gain of 0.13%, while the Nasdaq saw a 0.32% increase at the close of yesterday's trading session.

Bitcoin typically closely tracks risk-asset trends observed in indices like the Nasdaq and the SP 500. However, in the past 24 hours, the digital asset has been exhibiting a contrary performance to these trends.

March jobs data stronger than expected

The inflation reading comes after the U.S. Labor Department released employment figures for March last Friday. The data showed that U.S. employers added 303,000 jobs, exceeding expectations and signaling that the labor market remains strong despite higher interest rates.

The figures were notably stronger than the 200,000 job gains economists had anticipated. Because of the robust employment data and resilient economic activity, the Fed may be able to maintain unchanged rates for a more extended period.

Low unemployment and strong job growth can lead to upward pressure on wages and prices, potentially contributing to inflation. In such a scenario, the Fed may be more inclined to consider keeping interest rates steady rather than cutting them to prevent the economy from overheating.

The largest digital asset by market capitalization decreased by around 2% in the past 24 hours and was changing hands for $68,966 at 5:50 a.m. ET, according to The Block's Price Page . The  GM 30 Index , representing a selection of the top 30 cryptocurrencies, has decreased by 2.97% to 146.95 in the past 24 hours.