Bitcoin Hovers Near Highs Ahead of Halving Event and U.S. Inflation Data

Investing.com-- Bitcoin price rose on Tuesday, hovering below recent record highs as traders awaited more cues on the upcoming halving event and key U.S. inflation data. 

The world’s biggest cryptocurrency rose 2.5% in the past 24 hours to $71,133.3 by 01:37 ET (05:37 GMT), extending a recovery seen over the weekend. 

Still, the token remained below a record high of over $73,000 as broader risk appetite was dented by anticipation of key U.S. inflation data, which is widely expected to factor into the outlook for interest  rates. The consumer price index reading is due on Wednesday. 

Bitcoin price buoyed by halving watch

Bitcoin was underpinned chiefly by anticipation of the halving event, which is expected to occur later in April with the generation of block no. 840,000 on the Bitcoin blockchain.

The event is set to halve the rate at which new Bitcoin is mined, potentially tightening future supply of the token.

The halving ties into the narrative that scarcity of Bitcoin will push up its price, and is a closely-watched event for crypto markets. But it also pressures smaller Bitcoin miners by reducing their mining rewards.

Crypto price today: ETH, XRP rise but capital flows seen moderating

Gains in Bitcoin spilled over into other cryptocurrencies. World no.2 token Ethereum rose 7.6% to $3,688.20, while XRP rose 4.3% to $0.61785. 

Data from digital asset manager CoinShares showed on Monday that while crypto investment products saw capital inflows in the week to April 8, hype over the approval of spot Bitcoin exchange-traded products now appeared to be easing. 

Digital assets in total saw $646 million inflows last week, with a bulk of these being directed towards Bitcoin, which has largely dominated the crypto narrative in recent months.

Overall capital flows remained well below levels seen in early-March, while trading volumes also continued to decline from highs seen earlier in the year. 

The U.S. Securities and Exchange Commission’s approval of spot Bitcoin ETFs was the biggest driver of the token’s price gains so far in 2024. But this also saw the crypto market turn even more biased towards Bitcoin. 

Ethereum saw outflows of $22.5 million, as traders remained averse to the token amid reports of a SEC investigation into the Ethereum Foundation. 

The SEC is also set to decide on spot Ethereum ETFs in late-May.