Bitcoin moved little on Wednesday, amid waning optimism about a US-Iran deal to reopen the Strait of Hormuz, while caution ahead of key inflation data kept cryptocurrencies within a narrow trading range.
The world's largest cryptocurrency fell 0.40% to $63,700.10.
Bitcoin remained largely confined to a trading range between $60,000 and $65,000, lacking any immediate positive catalysts for the cryptocurrency market. Recent disclosures regarding further cryptocurrency sales by Strategy&, the largest institutional holder of Bitcoin, also negatively impacted the currency's performance.
Hormuz's fading hopes are putting pressure on risk appetite.
Investors' appetite for high-risk speculative investments has waned, amid fading confidence that the United States and Iran are close to reaching an agreement to reopen the Strait of Hormuz.
Shipping activity through this vital waterway has remained limited, despite repeated US assurances that it remains open and that negotiations with Iran are ongoing.
Tehran denied holding any talks with Washington and demanded that the United States agree to its compensation demands before any agreement could be reached regarding the Strait of Hormuz.
Oil prices jumped to near two-week highs on Wednesday, as clashes between the Houthis and Saudi Arabia intensified in the Red Sea, raising concerns about a global supply shortage.
High oil prices, in turn, have fueled concerns about persistently high inflation, which could prompt major global central banks to tighten their monetary policies.
This scenario is negative for speculative assets such as Bitcoin, given their heavy reliance on low interest rate environments and abundant liquidity.
Cryptocurrency prices today: Altcoins move quietly amid anticipation of July inflation data
Cryptocurrency prices broadly saw little movement, with the focus shifting entirely to the upcoming US Consumer Price Index data, in search of further clues about the path of interest rates.
The data is due to be released later on Wednesday and is expected to show a slight decline in inflation compared to the previous month.
However, any readings that exceed market expectations are likely to increase concerns about persistently high inflation and rising interest rates, a scenario that could portend short-term losses for cryptocurrencies.
Ethereum, the world's second-largest cryptocurrency, rose 0.70% to $1,887.38, while XRP climbed 1.40% to $1.0199.
Solana rose 0.30%, while Cardano fell 1.50%. BNP Paribas added 2.10%.
In the meme currency sector, Dogecoin rose by 2.20%, while Trump fell by 1.70%.
