Why did Bitcoin fall below $60,000 despite falling US inflation?
The continued decline in inflation data in the US caused Bitcoin to lose value. The largest cryptocurrency, which was traded above $61,000 before the data, fell by approximately $2,500.
The annual July CPI data in the US came in at 2.9%, and inflation fell below 3% for the first time in 3 years. The figures, which were within expectations and even below the expectations of some institutions, do not seem to have pleased the market. Bitcoin fell by $2,500, and fell to $58,800.
The 50 basis point expectation is lost
The biggest reason behind the decline seems to be the rate of the Fed's almost certain interest rate cut in September. The probability of a 50 basis point cut, which was priced above 50% before the inflation data, fell to 41% after the data was announced. The probability of a 25 basis point cut is priced around 58%.
This expectation did not only reduce Bitcoin. US markets were also painted red. While the S&P 500 fell below 5500, the Nasdaq also fell below 19,000. Tesla lost 2.6%, Coinbase lost 1.8% and MicroStrategy lost 3.3%.
There were also declines in gold and silver. While the ounce of gold fell to $2450, the ounce of silver is traded at $27.7.
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