Exchange Ranking
Top Exchanges
24h Volume Ranking
Popularity Ranking
Exchange BTC Balance
Proof of Reserves
Decentralized Exchanges
Funding Rate
Funding Heatmap
Liquidation Data
Max Pain
Long/Short Ratio
Whale L/S Ratio
Binance/Okex/Huobi L/S
Bitfinex Margin L/S
ETF Tracker
Solana ETF
XRP ETF
Hong Kong ETF
Bitcoin Treasuries
Crypto Reversal
Ethereum Reserves
HyperLiquid Wallet Analysis
Hyperliquid Whale Watch
Large Transactions
On-chain Movement
Bitcoin ROI
Stablecoin Market Cap
Options Analysis
News
Articles
Economic Calendar
Features
Wallet
Contract Calculator
Security
Collections
Watchlist
Following
BTC Bitcoin fell below US$78,000: U.S. inflation data exceeded expectations, and interest rate cut prospects clouded
On Wednesday, Bitcoin prices fell below US$78,000, giving up previous gains. The latest U.S. inflation data has intensified market doubts about whether the Federal Reserve can cut interest rates.
PCE data rekindled concerns about interest rate hikes
The world's largest cryptocurrency once soared to nearly US$81,235 in the day's trading, continuing the strong gains in August. However, with the release of personal consumption expenditure (PCE) data in July, the increase quickly narrowed. At one point, the price correction pushed Bitcoin to $78,000, wiping out almost all of the day's gains.
According to data from the U.S. Bureau of Economic Analysis (BEA), the PCE price index rose 0.2% in July from the previous month, compared with a 0.1% decline in June. On a year-on-year basis, the overall inflation rate reached 3.7%, slightly higher than the 3.6% expected in multiple market reports. After excluding volatile food and energy prices, the core PCE index also rose by 0.2% month-on-month, and the annualized core inflation rate remained unchanged at 3.3%.
Inflation indicators: July 2024, June 2024, market expectations
PCE year-on-year: 3.7%, no data, 3.6%
PCE month-on-month: 0.2%,-0.1%, no data
Core PCE month-on-year: 3.3%, 3.3%, no data
Core PCE month-on-month: 0.2%, no data, no data
Market observers believe that these data indicate that inflation risks still exist and may limit the Fed's ability to cut interest rates in the near term.
Fed policy outlook puts pressure on cryptocurrencies
Continued inflation is putting pressure on cryptocurrencies as it could push interest rates higher and keep government bond yields high. The minutes of recent Federal Reserve meetings show that policymakers are actively considering further tightening policies despite continued high price pressures.
On the eve of the data release, Bitcoin rose with gold, benefiting from falling bond yields, a weakening dollar and improved liquidity in government securities markets. These factors pushed Bitcoin up more than 28% in August, but the increase was reversed after the release of inflation data.
Wednesday's PCE data put market focus back on the Fed's next move. Higher inflation usually supports stronger bond yields and increases the likelihood of continued policy tightening, which historically has curbed investors 'risk appetite for speculative assets such as Bitcoin.
Short-term fluctuations will continue
The latest price reversal highlights Bitcoin's sensitivity to macroeconomic changes. Although the July Consumer Price Index (CPI) report showed a slight cooling in inflation, Bitcoin failed to maintain its upward momentum, reflecting the complexity of predicting cryptocurrency movements based solely on macroeconomic data.
The Long-term Bitcoin Investment Guide points out that increased volatility and macroeconomic uncertainty are key risks investors face when incorporating Bitcoin into their portfolios.
The next challenge for Bitcoin will be to hold on to the level of recent breakthroughs, especially as inflation remains stubborn and the Federal Reserve takes a more hawkish stance. If Treasury yields continue to rise, it may be difficult to reach the $80,000 mark again in the short term. Continued inflation in the United States could push up Treasury yields, limit the Fed's room to cut interest rates, and further exacerbate volatility in assets such as Bitcoin.
