The Bitcoin Cash (BCH) price was little changed on Monday as investors waited for the upcoming US inflation data. The coin is trading at $487, which is 25% above the lowest level in June and 70% below the highest level this year. BCH has a market capitalisation of more than $9.4 billion.
US inflation data ahead
Cryptocurrencies have been relatively muted in the past few weeks. This is partly because there have been no major news and events. Therefore, the upcoming US inflation data will likely have some implications on the price of Bitcoin Cash and other digital currencies.
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Inflation is an important data that affects all assets like cryptocurrencies, stocks, commodities, and currencies. This is because inflation has an impact on the Federal Reserve’s monetary policy. Higher inflation tends to lead to a hawkish tone and vice versa.
Economists polled by Reuters expect the data to show that the headline Consumer Price Index (CPI) rose by 4.9% year-on-year in June after rising by 5.0% in the previous month. They also expect that core CPI rose by 4.0% in June.
Higher-than-expected inflation numbers will increase bets that the FOMC will start talking about tightening in the coming meetings. On the other hand, if inflation starts falling, it will send a signal that the recent jump in prices was transitory as the Fed has said.
The US inflation data will come a week after the Fed released the latest hawkish FOMC minutes. The minutes showed that some members of the FOMC were in favour of tapering the bank’s asset purchases.
The Bitcoin Cash price is also in a tight range as the rest of cryptocurrencies wait for a catalyst. Bitcoin could be a catalyst now that its price has found comfortable support at $34,000.
Bitcoin Cash price prediction
The daily chart shows that the BCH price has been finding direction in the past few days. At the same time, it has formed a death cross, which happens when the 50-day and 200-day moving averages make a crossover. The coin has also formed a head and shoulders pattern, which is also a bearish signal. Therefore, there is a possibility that the pair coin will have a bearish breakout later this week. This prediction will be confirmed if it moves below the important support at $400.
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