Bitcoin's price dipped back below $30,000 after briefly surging above the threshold earlier in the day as traders positioned themselves ahead of Thursday's U.S. inflation reading.

CryptoQuant data showed bitcoin exchange reserves increased by almost 1,500 BTC, with the stockpile suggesting investors are positioning themselves to react swiftly to market responses to the forthcoming U.S. CPI data.

Bitcoin was changing hands for $29,727 at 12:00 p.m. ET, according to CoinGecko.

The earlier price action may had been influenced by a recent interest rate forecast from Federal Reserve Bank of Philadelphia president Patrick Harker.

“I believe we may be at the point where we can be patient and hold rates steady and let the monetary policy actions we have taken do their work,” the FOMC voting member said in a speech on Monday.

There are three Federal Open Market Committee rate decision dates left before the end of the year.

Inflation forecasts

Goldman Sachs analysts expect the U.S. CPI reading on Thursday to be lower than the consensus. The investment bank's longer term forecasts point to a decline in core CPI inflation by the end of 2024.

"On balance we believe the data will not warrant a further rate hike in December," James Butterfill, head of research at CoinShares, told The Block.