Inflation in the United States surged in June, exceeding expectations and shaking global and cryptocurrency markets.
Consumer inflation increased by 0.3% month-over-month, reaching 2.7% year-over-year, the highest since February, forcing investors to adjust their expectations for the monetary policy of the Federal Reserve.
MAIN CONTENT
US inflation in June increased by 0.3% month-over-month and 2.7% year-over-year, the highest this year.
Bitcoin plummeted nearly 6% after CPI data changed predictions about the Fed's interest rate cuts.
Political instability and high inflation pressure affect the sentiment of cryptocurrency investors.
How does Bitcoin react to the June CPI data?
Bitcoin immediately dropped sharply by nearly 6%, from a peak of 123,300 USD to around 116,227 USD, reflecting the sensitivity of cryptocurrencies to monetary policy fluctuations.
Bitunix's analysis emphasizes that Bitcoin could recover if it maintains the support range of 116,300 - 117,000 USD; otherwise, if it breaks this range, it will head towards a lower level of 110,500 USD.
BTC has gone through a short liquidation phase after several breakouts, with a key support area of 117,000 - 116,300 USD. If maintained, the price could recover; if broken, it will push down to 110,500 USD.
Bitunix, cryptocurrency market analyst, 2024
Bitcoin value before CPI Bitcoin value after CPI Volatility (%) 123,300 USD 116,227 USD -5.75%
How does politics affect volatility in currency and cryptocurrency markets?
Political instability in the United States, particularly concerning the potential change of Fed Chairman Jerome Powell due to criticism from former President Donald Trump, increases volatility risks in currency and cryptocurrency markets.
Deutsche Bank warns that such a move could cause the USD to fall by 3-4%, while government bond yields soar, creating significant pressure on global financial markets.
Changes in Fed leadership could cause significant instability, leading the USD to depreciate by 3-4% and increasing US bond yields, raising market volatility.
George Saravelos, Chief Economist of Deutsche Bank, 2024
How does inflation data impact cryptocurrency?
High inflation maintains pressure on interest rates, causing capital to shift away from risky assets like Bitcoin, Ethereum, and altcoins to safer channels with stable yields like bonds.
Although it did not create an immediate shock, the June CPI data serves as a warning for the cryptocurrency market that the likelihood of interest rate cuts is low, while political risks will prolong the volatility trend.
Frequently Asked Questions
How does June inflation affect Bitcoin?
Bitcoin dropped nearly 6% due to expectations that the Fed would maintain high interest rates, increasing the pressure to sell risky assets (Source: Bitunix).What is Core CPI and how does it impact?
Core CPI excludes food and energy, still rising by 0.2% month-over-month, maintaining stable inflation pressure that makes the Fed cautious.How does US politics change the currency market?
Instability at the Fed could cause the USD to depreciate, increase bond yields, and ignite global financial volatility (Source: Deutsche Bank).How has the rate cut probability for September changed?
The probability of a rate cut has decreased from over 80% to 60% according to the CME FedWatch Tool, reflecting market caution.What should cryptocurrencies prepare for in this situation?
Investors need to closely monitor economic and political data to adjust their portfolios and avoid risks from dual volatility.
Source: https://tintucbitcoin.com/bitcoin-truoc-lam-phat-27-moi-nhat/
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