Recent inflation data from the US has significantly impacted the financial markets, including a drop in Bitcoin prices. This article explores the reasons and consequences of this event.
Inflation Data Pressures Markets
A recent report from the US Bureau of Labor Statistics indicated that the Consumer Price Index (CPI) for June was at 2.7% year-over-year, slightly above the expected 2.6%. This marks the second consecutive monthly increase. Markets reacted by lowering the likelihood of a rate cut by the Federal Reserve in their upcoming July meeting, with the chances dropping from 4.7% to just 2.6%.
Bitcoin Volatility and Traders' Response
Following the release of the data, Bitcoin experienced significant volatility, briefly spiking to $123,300 before plunging nearly 6% to a low of $116,227. As of now, the price of Bitcoin is around $116,334.61. Analysts from Bitunix noted that Bitcoin faced pressure after a series of breakouts and highlighted a support zone at $117,000–$116,300.
Future Perspectives
Analysts warn that political uncertainty and speculation surrounding Federal Reserve leadership could introduce more market instability. Bitcoin, remaining sensitive to rate expectations, may continue to exhibit volatility leading up to the FOMC meeting on July 30.
The rise in US inflation continues to significantly impact financial markets, including Bitcoin, which is showing high volatility. Expectations regarding interest rates have also shifted, creating additional pressure on assets.
