Coin World Report:
Despite favorable inflation data, the price of Bitcoin unexpectedly fell. Despite a decrease in inflation and a relaxed job market, BTC remains at $57,200, contrary to speculations of over $60,000. This puzzling trend has raised questions about what is hindering cryptocurrency investors.
Section 1: Market Reaction Analysis
The Consumer Price Index (CPI) was expected to be 3.1% but was announced as 3%, exceeding expectations. Nevertheless, Bitcoin is still struggling to break through $58,000. The anticipated interest rate cut in September did not provide the expected stimulus, leaving seasoned investors frustrated. Analyst DaanCrypto believes that Bitcoin’s current weakness can be attributed to market makers and leverage long positions liquidated by scalpers. Visit NEWSLINKER for the latest tech news.
Prior to the positive inflation data announcement, leverage positions increased by approximately $300 million, but as Bitcoin prices fluctuated counterintuitively, leverage positions began to decline. However, analysts believe that given the accumulation of bullish news, Bitcoin should soon recover to $60,000. With the Fed rate cut, some investors expect a shift from safe havens to risk markets, including Bitcoin.
Section 2: Market Dynamics
Chris Larkin told CNBC that the possibility of a Fed rate cut in September has increased due to the latest wage growth data. Hourly earnings have slowed down, and employment is weakening. With ongoing inflation decline, the Fed has almost no reason to avoid a rate cut, creating a potential favorable environment for Bitcoin’s recovery.
Section 3: Key Insights
– Scalpers and market makers are currently liquidating leverage long positions.
– With Bitcoin moving in the opposite direction of expectations, the $300 million worth of positions decreased.
– The Fed’s potential rate cut could prompt investors to turn to Bitcoin. Bitcoin spot ETF has seen an inflow of $800 million in the past four days.
Section 4: Conclusion
FedWatch indicates that the market currently sees a 47% possibility of two rate cuts before the end of the year, up from 24% last week. Despite these macroeconomic changes, Bitcoin’s price has not reacted as expected. Data from Farside Investors shows a significant inflow of funds into Bitcoin ETFs, but the price of Bitcoin remains stagnant. If historical trends indicate anything, the market may be preparing for rapid growth.
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