U.S. CPI in June was positive but Bitcoin still fell. Analysts revealed 3 major reasons
The U.S. CPI data for June was released, with the annual CPI growth rate at 3% and the core CPI annual growth rate at 3.3%, both slightly lower than market expectations. Meanwhile, market expectations for a first rate cut in September rose to 86.4%, CME Group Fed Monitor data showed.
Source: Fed Observer
The market expects the probability of the first U.S. interest rate cut in September to rise to 86.4%
After the CPI data was released, Bitcoin briefly reached a high of $59,650, and then fell rapidly. As of this morning (12th), it once fell to a low of 56,542. It is currently quoted at $57,318, with an intraday decline of 0.91%.
According to "Cointelegraph", some investors questioned why the price of Bitcoin is still below $58,000 despite the positive CPI data. Page, who has 17 years of experience as a sales trader in a traditional bank and is now a cryptocurrency analyst Marcel Pechman, director of the Census Bureau, offers three reasons why the market may be lacking enthusiasm.
Reason 1: The German government’s selling panic is still there
Arkham data shows that the German government has continued to transfer and sell Bitcoin recently, but the good news is that there are currently less than 5,000 Bitcoins available for sale.
Reason 2: The market is concerned about the profitability of Bitcoin miners
Since the April halving, miners have begun selling Bitcoin inventory to balance costs. CryptoQuant data shows that large miners have sold $300 million worth of Bitcoin since June 20, while mid-sized miners have also offloaded about $500 million.
Reason three: Market concerns about economic recession
Pageman believes that the market is still worried that the weakness of the real estate market, especially in China, will hinder global economic growth. If corporate profits disappoint in the second half of 2024, investors may seek the safety of cash positions, which would be detrimental to risk assets including Bitcoin.
These comprehensive factors explain why the U.S. CPI is positive and expectations of interest rate cuts have increased, but Bitcoin still fails to regain the support level of $60,000.
Bitcoin’s correlation with U.S. stocks falls to multi-month low
Data from "The Block" shows that the 30-day correlation between Bitcoin and the Nasdaq and S&P Index has fallen to -0.84 and -0.82, setting new lows since November 2023.
The U.S. stock market has performed well recently, with some indexes reaching new highs. However, Bitcoin has continued to decline and consolidate. Before and after the release of U.S. CPI data, it roughly fluctuated between $56,000 and $60,000.
YouHodler market director Russian Lienkha said that the decoupling of Bitcoin from U.S. stocks is mainly related to the recent selling pressure events. The German and U.S. governments and the bankrupt exchange Mt. Gox’s compensation have all caused considerable pressure on the market.
He predicted that Bitcoin may briefly fall to the $50,000 to $52,000 range and usher in a rapid rebound, and the impact of the selling event will be temporary.
[Disclaimer] There are risks in the market, so investment needs to be cautious. All analyzes and opinions in this article are for reference only. Users should refer to more diverse indicators to judge whether to invest, and consider whether any opinions, views or conclusions in this article are consistent with their specific circumstances. Invest accordingly and do so at your own risk.
