The US Bureau of Labor Statistics (BLS) recently released the Consumer Price Index (CPI) for June, showing a figure of 3% year over year. Despite slowing US inflation, the price of Bitcoin (BTC) only rose briefly to as low as US$58,000 before falling back to US$57,000 in the last 24 hours.
Factors Influencing Bitcoin Price Stagnation
1. Uncertainty regarding US Interest Rates
The lower CPI reading strengthened market expectations of a September rate cut. However, Federal Reserve Chairman Jerome Powell emphasized that the Fed is not ready for this move, adding to the uncertainty affecting Bitcoin's reach of the US$58,000 level.
2. Actions of Brokers and Market Makers
Cointelegraph analysis suggests that the current weakness in Bitcoin’s price could be attributed to scalpers and market makers attempting to liquidate leveraged long positions. However, there is optimism that Bitcoin could recover to $60,000 by taking advantage of a potential interest rate cut.
3. Selling Pressure from German Government and Miners
Bitcoin sales by the German government and miners selling their $BTC are also putting additional pressure on prices. Arkham Intelligence reports that there are only a few $BTC left to sell after the German government sold most of its $BTC holdings. In addition, the block subsidy cut in April is also encouraging miners to sell more of their assets.
Conclusion
The current situation shows that although the decline in US inflation seems bullish for Bitcoin, factors such as uncertainty regarding interest rates, market activity, and massive selling by governments and miners have held Bitcoin back from reaching higher levels in a short period of time.
Disclaimer
This article is provided for information and reference only and does not constitute investment advice. Cryptocurrency trading involves risks and investment decisions are made solely by the reader after conducting thorough research.
