Bitcoin Tumbles Following Higher Than Anticipated US Core Inflation Data
11 Septiembre 2024 - 11:09AM
NEWSBTC
The higher-than-anticipated US core Consumer Price Index (CPI)
reading was followed by a decline in Bitcoin (BTC) price as it
tumbled almost 1.5% to $56,168 at press time. US Headline CPI
Matches Forecast, Core CPI Exceeds It US headline CPI, the metric
typically used to assess the inflation rate in the country, came in
according to expectations at 0.2% month-over-month (MoM), and 2.5%
year-over-year (YoY) for August 2024. However, core CPI (MoM)
printed 0.3%, slightly higher than the 0.2% forecasted by
economists. For the uninitiated, the difference between the
headline CPI and core CPI is the constituents of the basket of
items they assess. While the headline CPI measures all item
categories, including housing, transportation, services, medical
care, food, and energy, core CPI excludes food and energy prices to
give a more stable view of underlying inflation trends. By removing
the price of volatile items from its calculation, core CPI is often
considered a more accurate indicator of long-term inflation.
Following the unexpected core CPI print, BTC witnessed a quick
decline in price as it fell from around $57,000 to $56,168 at the
time of writing. The wider crypto market displayed similar trends
as Ethereum (ETH), Binance Coin (BNB), Solana (SOL), and Ripple
(XRP), which are down by 2.1%, 1.3%, 4.6%, and 2.4%, respectively.
With the CPI data for August 2024 released, it seems all but
certain that the US Federal Reserve (Fed) will begin its rate-cut
cycle with a 25 basis points (bps) cut in September. In a note,
Capital Economics’ Paul Ashworth said: On balance, we still think
the Fed will begin its rate cutting cycle with a more modest 25 bps
cut. The 3.2% annual core CPI was mostly due to a 5.2% increase in
shelter prices, while the three-month annualized core CPI rebounded
only to 2.1% from a weak 1.6%. Related Reading: How Will The US
Upcoming Fed Rate Cut Impact Bitcoin? QCP Analysts Weigh In Indeed,
following the CPI data release, the probability of the Fed slashing
rates by 25 bps next week has jumped to 83%, per data from CME
FedWatch. Assuming the Fed reduces rates by 25 bps, it should
instill some confidence in crypto and stock
markets, fearing a 50 bps cut could signal the Fed not
being fully confident in its ability to tackle inflation. What Lies
Ahead For Bitcoin? As BTC remains loosely range-bound between
$52,000 to $70,000 on the daily chart, analysts are speculating on
the future trajectory the leading digital asset’s price could take.
Some analysts opine that BTC’s current price action is reminiscent
of a similar price consolidation in 2023. If the same scenario
plays out in 2024, we could see a new Bitcoin all-time-high (ATH)
price. It will also be interesting to see the impact of the US
Presidential Elections scheduled to happen in November 2024.
Interestingly enough, some election-agnostic analysts have stated
that no matter who wins the election later this year, BTC is slated
to win in the long term. Related Reading: Ripple Co-Founder
Endorses Kamala Harris’ Campaign Ahead Of Presidential Debate At
the time of writing, Bitcoin trades at $56,168 while the total
cryptocurrency market cap sits at $1.94 trillion, down 2.3% in the
past 24 hours. Featured Image from Unsplash.com, Charts from
cmegroup.com and TradingView.com
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