Bitcoin (BTC) Price Rallies Ahead of Inflation Print, Falls After CPI Report Comes In Cool
- WBOYOriginal
- 2024-08-17 18:23:20959browse
It could be a buy the rumor, sell the news situation with Bitcoin price and the Labor Department's CPI report Wednesday morning.
Bitcoin price fell 3% after the Labor Department’s latest Consumer Price Index (CPI) report showed that inflation in the U.S. remained stubbornly high. Economists had expected the report to show a lower rate of inflation, but instead it showed that prices rose 0.2% in August from July and 8.3% year-over-year. The core inflation rate, which excludes food and energy prices, also rose 0.6% from July and 6.3% year-over-year.
Bitcoin price fell from $58,000 at the time of the report’s release to around $56,200 by early Thursday morning. BTC’s price then recovered slightly and was trading around $56,600 at the time of writing.
Despite the report showing a higher rate of inflation than economists had expected, Bitcoin price still managed to rally in the lead-up to the event. BTC’s price rose by around 5% for the week and 24-hours before the CPI report was published. However, the price fell after the report was released, suggesting that traders were expecting a lower rate of inflation.
The CPI report is closely watched by traders and investors as it provides the latest data on inflation in the U.S. The Federal Reserve uses this data to set its monetary policy, which can have a significant impact on Bitcoin price.
A lower rate of inflation typically leads to the Fed cutting interest rates or signaling that it will reduce them again in the near future. This tends to be bullish for BTC’s price, as it makes the cryptocurrency more attractive to investors seeking higher yields.
On the other hand, a higher rate of inflation typically leads to the Fed raising interest rates or slowing the pace of rate cuts. This tends to be bearish for Bitcoin price, as it makes the cryptocurrency less attractive to investors.
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