Bitcoin, along with other cryptocurrencies, is facing a decline in the wake of fresh inflation figures from the United States. This setback occurs despite a recent bullish momentum spurred by a landmark court ruling favoring the crypto industry. As we head into September—a month that has traditionally not been kind to Bitcoin—market participants are becoming increasingly cautious.
A Brief Price Recap
Over the last day, Bitcoin's value dipped less than 1% to settle at $27,250. The digital currency had a modest uptick of about $50 following the release of U.S. inflation statistics. Earlier in the week, Bitcoin had touched highs above $28,000. This peak came after a U.S. court's decision against the Securities and Exchange Commission, a ruling that could open the doors for a Bitcoin-focused exchange-traded fund (ETF).
Analysts Weigh In
Alex Kuptsikevich, an analyst at FxPro, noted, "After experiencing a buying surge, the crypto market is now slowing down." Despite a temporary rise to $28,000, Bitcoin fell back to $27,000, a significant retreat from its initial leap from $26,000. The cryptocurrency also slipped below its 200-day and 200-week averages, even amidst escalating risk levels in traditional financial markets.
Stock Market Vs. Crypto Performance
Lately, Bitcoin has not kept pace with major indices like the Dow Jones and S&P 500. This sluggish performance comes during one of the calmest price volatility periods in cryptocurrency history. Many traders had anticipated that Thursday's personal consumption-expenditures (PCE) data, the Federal Reserve's chosen inflation gauge, would spark market movement. However, these expectations seem to have been misplaced.
Inflation and Economic Outlook
The Core PCE for July increased by 4.2% YoY, meeting analysts' expectations but marking a minor rise from June's 4.1%. Economic indicators like these are crucial for assets sensitive to risk. With the Fed having raised interest rates to historical highs since March 2022, both Bitcoin and traditional stocks have felt the pressure.
Investors are keenly watching for signs that could prompt the Federal Reserve to adjust its monetary policy. A less-than-stellar August jobs report, expected this Friday, could serve as a catalyst for Bitcoin to regain some ground.
What Lies Ahead?
Antoni Trenchev, co-founder and managing partner at Nexo, suggests that the upcoming jobs report "could reignite Bitcoin's upward momentum that faded after Tuesday’s rally."
As the trading month of September approaches—a month traditionally tough on Bitcoin—the jobs report may offer the last opportunity for cryptocurrencies to make a positive move.
Altcoins Also Feeling the Heat
Apart from Bitcoin, Ethereum (the second-largest cryptocurrency by market cap) dropped slightly to $1,710. Meanwhile, smaller tokens had mixed fortunes. Cardano saw less than a 1% gain, Polygon increased nearly 2%, Dogecoin was up by 3%, while Shiba Inu declined slightly.
In summary, as September looms—a month known for its historical bearishness for Bitcoin—traders and investors are keenly observing macroeconomic indicators and awaiting a potential market catalyst in the form of the August jobs report.
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