🪙 Bitcoin (BTC): Recorded an initial rise above $119,000 after the Consumer Price Index (CPI) data, which came in lower than expectations at 2.7% annually compared to the expected 2.8%. This support is based on expectations for a potential rate cut. However, with core inflation (Core CPI) reading rising to 3.1%, it seemed that the gains did not last long, leading to a slight decline after the initial rise.
🔷 Ethereum (ETH): Outperformed Bitcoin with a stronger upward movement, surpassing $4,350, and saw additional momentum due to the liquidation of short positions of about $40 million in the past hour.
What happened and why? 🤔
📉• General inflation decline: The softened inflation reading at 2.7% cast initial positive shadows on the digital market, increasing confidence in the possibility of interest rate cuts by the Federal Reserve.
📈• Core inflation rise: However, the Core CPI reading at 3.1% indicates ongoing inflationary pressures, which limited optimism regarding interest rate cuts and created a kind of anticipation in the market.
📉📈• Rate cut expectations: The market is now sending strong signals towards the possibility of a rate cut in September, with the majority of assessments ranging between 82% to 90% probability, based on market assessment tools.
Quick summary:👇
🪙• Bitcoin: Initial rise followed by a slight decline in moderate response to mixed data.
🔷• Ethereum: Stronger performance driven by short position liquidation.
• General market: Balancing optimism about easing inflation and concerns about ongoing core inflation.