Bitcoin price action did not reflect relief in US CPI inflation numbers matching expectations amid a warning over $63,000 failing as support.<\/p>\n
Bitcoin (BTC) saw weakness around Wednesday\u2019s Wall Street open as markets reacted to key US inflation data.<\/p>\n
Data from TradingView showed BTC\/USD dropping below $63,500, erasing the day\u2019s gains.<\/p>\n
BTC\/USD one-hour chart. Source: Cointelegraph\/TradingView<\/p>\n
US stocks were calm after the July print of the US Consumer Price Index (CPI) matched expectations, at 0.1% month-on-month and 3.4% year-on-year.<\/p>\n
\u201cThe index for shelter rose 0.1 percent in July, accounting for roughly two-thirds of the monthly all items increase. The index for food also increased 0.1 percent over the month, as the index for food away from home increased 0.3 percent. In contrast, the energy index declined 1.5 percent in July,\u201d an official release from the Bureau of Labor Statistics (BLS) reported.<\/p>\n
While not repeating the surprise move to the downside seen in June, CPI inflation avoided injecting volatility into risk assets. Among safe havens, gold remained stable after reaching its highest levels in nine weeks on Tuesday.<\/p>\n
Fabian Dori, CIO at Sygnum Bank, put the focus on expectations for future Federal Reserve policy changes. Cooling CPI combines with weak labor-market figures to potentially bolster the case for the Fed avoiding interest-rate hikes \u2014\u00a0an outcome that would benefit crypto and risk-asset liquidity conditions.<\/p>\n
\u201cAn in-line CPI print after Friday\u2019s \u201323k jobs report points to gradual cooling without a recession scare or a fresh hawkish re-pricing. September rate odds should stay roughly stable, leaving the macro backdrop for risk assets largely unchanged,\u201d he said in emailed comments.<\/p>\n
The latest data from CME Group\u2019s FedWatch Tool saw 60% odds of the Fed holding rates at the current 3.50-3.75% level at its September meeting \u2014 up from 30% a month ago.<\/p>\n
Fed target-rate probability comparison for September FOMC meeting (screenshot). Source: CME Group<\/p>\n
Thursday provides the week\u2019s second US macro report with potential implications for market volatility in the form of July Producer Price Index (PPI) numbers, which in June followed CPI in coming in below expectations.<\/p>\n
\u201cAn in-line CPI print does not resolve much after Friday\u2019s payrolls miss. The more interesting detail is that the Bitcoin options market is still charging a material premium for protection\u201d Andrei Grachev, managing partner at DWF Labs, told Cointelegraph. \u201cOn the end-August expiry, downside strikes near $60,000 have been costing more than equivalent upside strikes near $70,000.\u201d<\/p>\n
\u201cTomorrow\u2019s PPI is the next check on whether that premium starts to ease,\u201d he added.<\/p>\n
Related: Crypto companies urge AI firms to give Bitcoin developers early access<\/p>\n