Thursday's much-anticipated U.S. Consumer Price Index (CPI) report came in better than expected, with inflation falling to its lowest level in more than three years in June. The CPI rose 3% year-over-year, beating expectations for 3.1%, while the core CPI fell to 3.3% year-over-year, below expectations for 3.4%.

The CPI data suggested that inflation continued to cool, bolstering investors’ bets that the Federal Reserve will cut interest rates later this year. CME Fed Watch data showed that a September rate cut was almost a done deal, with data showing an 84.6% chance of a 25 basis point rate cut in September and an 8.1% chance of a cumulative 50 basis point cut.

BTC has experienced a "roller coaster" market. After the release of CPI, Bitcoin hit a high of around $59,540, then experienced a large sell-off and then fell to a low of $57,200. The current price is $57,330.

In the U.S. stock market, large technology stocks such as Nvidia (NVDA), Microsoft (MSFT) and Meta (META) all fell, while Tesla (TSLA) ended its 11-day winning streak with a drop of more than 7.5%. As of the close of the day, the S&P and Nasdaq indexes fell 0.88% and 1.95% respectively, and the Dow Jones rose 0.08%.

Dezi's $3 billion selling spree is coming to an end

At the current pace, the German Bitcoin sell-off could end as early as Friday or early next week, as the wallet has sold around 35, 000 Bitcoins so far this week.

This could help ease concerns in the market, where traders have been focusing on on-chain movements of potential large sellers in the market over the past few weeks, linking the recent decline to selling pressure.

The market is expected to rebound from late July

Although Bitcoin has struggled to gain momentum due to a number of factors, most analysts, including JPMorgan, believe that the outlook will turn around.

According to a research note released by JPMorgan, liquidations in crypto markets should begin to subside in July, with markets expected to rebound from August.

Despite the expected improvement in market sentiment, the bank lowered its year-to-date net cryptocurrency flow forecast from $12 billion to $8 billion, saying it doubted that the previously estimated $12 billion level could be sustained for the rest of the year given Bitcoin’s high price relative to its production costs.

The estimated decrease in net flows is mainly due to a decline in the reserves of Bitcoin at various exchanges over the past month. Liquidation of Bitcoin by Mt. Gox creditors and a sale of Bitcoin by the German government are likely reasons for the decline in reserves.

Historically, Bitcoin has had a positive correlation with the S&P; however, this correlation began to weaken in late May as U.S. stocks surged while Bitcoin struggled with sideways and declines. This could change soon, with Bitcoin potentially catching up quickly through rapid price gains.

The Bitcoin Accumulation Trend Score indicates a shift in investor sentiment, with many now choosing to accumulate BTC after a period of selling since April.

The recent sideways price action is typical of a Bitcoin bull cycle. It is easy for BTC to reach $100,000 before this bull run ends.

While you’re scared, the smart money is doubling down, and that’s because this drop is nothing new. As you can see, Bitcoin hits new all-time highs every 4 years:

2012: Bitcoin rose from $12 to $1,000 = an increase of about 9,000%;

2016: Bitcoin rose from $650 to $19,000 = an increase of about 3,000%;

2020: Bitcoin rose from $8,000 to $69,000 = an increase of about 1,200%;

2024: ?

Note that in each consecutive cycle, Bitcoin's return rate has fallen by about 60%, so the current pullback is just a normal phenomenon in the bull market.

At present, the progress of inflation decline is good. There is no need to wait until inflation drops to 2% annually before cutting interest rates. In response to the low inflation rate announced yesterday, we currently believe that the market is still too conservative about the trend of interest rate cuts. The cryptocurrency market will sooner or later reflect the dollar value of the interest rate decline. Since interest rate expectations have been almost digested, the actual price reflection needs to wait until the actual interest rate cut in September this year, and funds will be expected to flow back into the cryptocurrency market.

Later, I will bring you analysis of leading projects in other tracks. If you are interested, you can click to follow. I will also organize some cutting-edge consulting and project reviews from time to time. Welcome all like-minded people in the cryptocurrency circle to explore together.