Bitcoin is seeing a price decline following rising expectations for Federal Reserve rate cuts. Inflation data raises concerns about the economic outlook.
Price Decline and Fed Odds
Bitcoin retreated from its all-time high of $124,420 to $117,760 as of Saturday, August 16. Its market cap decreased from $2.47 trillion to $2.34 trillion, coinciding with falling odds of a Federal Reserve rate cut, amidst stagflation concerns.
Inflation Data Impact on Market
The price of Bitcoin spiked to record highs on August 14 after the Bureau of Labor Statistics released encouraging inflation data. However, sentiment shifted the next day when producer price index data soared to 3.6% in July, raising concerns about the Fed’s potential rate cuts expected in September.
Technical Analysis of Bitcoin
Bitcoin's price chart shows increasing pressure as a bearish double-top pattern forms at $123,200, supported by a neckline at $112,000. Additionally, bearish divergence appears on the RSI and MACD, indicating potential further declines before a rebound.
The decline in Bitcoin's price reflects changing expectations about the Fed's monetary policy and a negative reaction to inflation data. The coming days may be critical for the currency's trend.
