Bitcoin Price Returns to a Volatility-Free Existence After US Inflation Data

• Market experts expect Bitcoin and Ethereum to remain stable before a potential rally supported by the easing of macroeconomic conditions.
• According to data, Bitcoin has dropped by 0.53% in the last 24 hours, trading at $29,403, but has increased by 0.66% on a weekly basis.
• Mary Daly, the president of the San Francisco Fed, said in an interview that the latest CPI data did not indicate that the central bank had overcome inflation.

After the inflation data in the US, the price of Bitcoin fell below $29,500 and returned to a low-volatility market; What will happen now?

Bitcoin Price Dropped Below $29,500

The Consumer Price Index (CPI) is one of the primary assessments of the Federal Reserve when determining interest rate policy. Last month’s June report was the lowest level in two years, and broad expectations point to another decrease in July. And these predictions were correct.

The price of Bitcoin has fallen below $29,500 today. Market experts expect Bitcoin and Ethereum to remain stable before a potential rally supported by the easing of macroeconomic conditions. According to data, Bitcoin has dropped by 0.53% in the last 24 hours, trading at $29,403, but has increased by 0.66% on a weekly basis.

The latest Consumer Price Index (CPI) data showed an appropriate level of CPI growth as economists predicted. The Consumer Price Index (CPI) increased by 0.2% in July, and Core CPI, excluding food and energy, also increased by 0.2%. The Fed believes that due to a 3.2% increase in CPI and a 4.7% increase in Core CPI, the likelihood of not raising interest rates in September as part of its fight against inflation policy is lower.

In addition to macroeconomic factors, analysts continue to question why Bitcoin has not surpassed $30,000. The headline Consumer Price Index (CPI) report published by the US Department of Labor on Thursday showed a 0.2% increase in July, raising the inflation rate to 3.2%. This is lower than the 3.3% predicted by analysts.

Factors Affecting Bitcoin’s Price Movement

According to recent reports, analysts and stakeholders in crypto trading firms continue to point out uncertainties such as the approval of a spot Bitcoin ETF by the SEC, miners’ profitability before the Bitcoin halving, lack of new retail market participation, and strong resistance in derivative trading. These contribute to a tight trading range and suppressed volatility.

Although many adrenaline-addicted crypto traders may miss the volatility, Bitcoin seems to be a really good store of value these days. On the market calendar, analysts are watching August 13th; the first deadline for ARK Invest’s spot Bitcoin exchange-traded fund (ETF) application in the US. ARK initially submitted the application in April and then resubmitted it in July with a modification.

Cathie Wood, CEO of ARK Invest, stated in a statement on Monday that if the US Securities and Exchange Commission decides to approve, it will likely approve multiple spot Bitcoin ETF applications simultaneously.

Furthermore, investors should evaluate the US Producer Price Index report today. An increase in inflation pressure could increase the likelihood of a Fed interest rate hike in September and intensify recession fears.

On Thursday, Mary Daly, the president of the San Francisco Fed, said in an interview that the latest CPI data did not indicate that the central bank had overcome inflation. She also added that the Fed’s commitment to achieving a 2% inflation target continues unabated.

The Fed will meet on September 19th to determine the future movement of interest rates, currently between 5.25% and 5.50%, the highest level in 22 years. CME FedWatch sets the probability of an interest rate increase in September at 89.0%.