Bitcoin Tumbles Following Higher Than Anticipated US Core Inflation Data

The higher-than-anticipated US core Consumer Price Index (CPI) reading was followed by a decline in Bitcoin (BTC) price as it tumbled almost 1.5% to $56,168 at press time. US Headline CPI Matches Forecast, Core CPI Exceeds It US headline CPI, the metric typically used to assess the inflation rate in the country, came in according to expectations at 0.2% month-over-month (MoM), and 2.5% year-over-year (YoY) for August 2024. However, core CPI (MoM) printed 0.3%, slightly higher than the 0.2% forecasted by economists. For the uninitiated, the difference between the headline CPI and core CPI is the constituents of the basket of items they assess. While the headline CPI measures all item categories, including housing, transportation, services, medical care, food, and energy, core CPI excludes food and energy prices to give a more stable view of underlying inflation trends. By removing the price of volatile items from its calculation, core CPI is often considered a more accurate indicator of long-term inflation. Following the unexpected core CPI print, BTC witnessed a quick decline in price as it fell from around $57,000 to $56,168 at the time of writing. The wider crypto market displayed similar trends as Ethereum (ETH), Binance Coin (BNB), Solana (SOL), and Ripple (XRP), which are down by 2.1%, 1.3%, 4.6%, and 2.4%, respectively. With the CPI data for August 2024 released, it seems all but certain that the US Federal Reserve (Fed) will begin its rate-cut cycle with a 25 basis points (bps) cut in September. In a note, Capital Economics’ Paul Ashworth said: On balance, we still think the Fed will begin its rate cutting cycle with a more modest 25 bps cut. The 3.2% annual core CPI was mostly due to a 5.2% increase in shelter prices, while the three-month annualized core CPI rebounded only to 2.1% from a weak 1.6%. Related Reading: How Will The US Upcoming Fed Rate Cut Impact Bitcoin? QCP Analysts Weigh In Indeed, following the CPI data release, the probability of the Fed slashing rates by 25 bps next week has jumped to 83%, per data from CME FedWatch. Assuming the Fed reduces rates by 25 bps, it should instill some confidence in crypto and stock markets, fearing a 50 bps cut could signal the Fed not being fully confident in its ability to tackle inflation. What Lies Ahead For Bitcoin? As BTC remains loosely range-bound between $52,000 to $70,000 on the daily chart, analysts are speculating on the future trajectory the leading digital asset’s price could take. Some analysts opine that BTC’s current price action is reminiscent of a similar price consolidation in 2023. If the same scenario plays out in 2024, we could see a new Bitcoin all-time-high (ATH) price. It will also be interesting to see the impact of the US Presidential Elections scheduled to happen in November 2024. Interestingly enough, some election-agnostic analysts have stated that no matter who wins the election later this year, BTC is slated to win in the long term. Related Reading: Ripple Co-Founder Endorses Kamala Harris’ Campaign Ahead Of Presidential Debate At the time of writing, Bitcoin trades at $56,168 while the total cryptocurrency market cap sits at $1.94 trillion, down 2.3% in the past 24 hours. Featured Image from Unsplash.com, Charts from cmegroup.com and TradingView.com

Name	Symbol	Market	Market Cap ($)	Algorithm
Bitcoin	BTCUSD	Crypto	1,235,030,883,894	SHA-256d

	Price Change	Price Change %	Current Price	Bid Price	Offer
	-223.00	-0.35%	62,626.79	62,627.47	62,629.84

High Price	Low Price	Open Price	Prev. Close	52 Week Range
62,847.25	62,426.67	62,835.15	62,849.79	26,797.00 - 73,835.57

Exchange	Last Trade	Size	Trade Price	Currency
BSTP	02:11:52	0.006110	62,615.00	USD

Price x Volume	Volume	Base Symbol	Related Pairs
9,848,706.12	157.35	BTC	BTCEUR	BTCGBP	ETHBTC

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

BTCUSD Bitcoin