Bitcoin Experiences 5% Drop Following Low CPI Announcement

Bitcoin (BTC) sees a sharp price fall below $59,000, disregarding optimistic news regarding US inflation rates.

Market Analysis

Bitcoin experienced typical “fakeout” fluctuations during the Wall Street opening on August 14, where traders reacted to macroeconomic data from the United States.

BTC Price Drops by $3,000 Despite Positive CPI Report

According to data from TradingView, the price of BTC surged close to $62,000 after the release of the latest Consumer Price Index (CPI) report.

Though the report came in below market expectations and was expected to boost risk assets and cryptocurrencies, the initial positive reaction from Bitcoin quickly waned.

After reaching $61,809 on Bitstamp, the BTC/USD pair experienced a decline of more than 3% within a little over an hour.

In response, a well-known trader, Daan Crypto Trades, noted the erratic movements of BTC in relation to US macroeconomic releases and expressed some relief. He commented that the CPI report, which mostly aligned with estimates, was unlikely to significantly impact the markets.

“Thus far, the absence of significant upside or downside surprises is positive,” he mentioned.

Market Sentiment and Future Projections

The latest insights from the CME Group’s FedWatch Tool indicate that traders are leaning towards the possibility of a minor interest rate reduction at the Federal Reserve’s upcoming meeting in September.

As headline inflation decreases, traders speculate that interest rate cuts may soon follow, although some categories may see a resurgence of inflation.

Trader Targets $55,000 for Potential Long Position

Fellow trader Roman suggested that Bitcoin might experience another 10% decline from the current price. He highlighted the insufficient trading volume as a barrier to sustaining higher price levels.

“I’m anticipating the price to reach 58k and possibly dip to 55k before considering any long positions,” he shared with his followers.

“I remain cautious, noting the lack of strength to support an upward continuation given the bearish price action and low trading volume.”

This article does not provide investment advice or recommendations. Every trading decision comes with risks, and it is essential for readers to conduct thorough research before proceeding.