U.S. CPI in January was higher than expected: Bitcoin lost $50,000, ending 7 consecutive gains

Author: Block Girl MEL; Source: Blockcast

The U.S. Department of Labor announced on Tuesday that 1 The overall core consumer price index (CPI) in May was both higher than Wall Street's expectations, extinguishing investors' expectations for an interest rate cut in the first half of this year and putting pressure on risk assets. Bitcoin fell below the US$50,000 mark, reaching as low as US$48,385. Analysts pointed out that the "bad" inflation data, while causing a short-term shock, would not "seriously weaken sentiment in the cryptocurrency market."

According to CoinGecko data, as of the time of writing, Bitcoin has recovered some of its losses and rebounded to $49,504, down 1.2% in the past 24 hours, and the overall market has fallen. , the top ten cryptocurrencies were in a sea of ​​blood, with declines ranging from 1.2% to 5%.

According to the U.S. Department of Labor, CPI increased by 3.1% annually in January and core CPI increased by 3.9% annually, both higher than economists' expectations. CME Group's (CME) FedWatch tool shows that market traders expect the odds of a rate cut in May this year to have dropped from 52% to 34%.

Craig Erlam, senior analyst at online trading platform OANDA, said in a report on Tuesday: "This is not what the Federal Reserve (Fed) wants to see. inflation report, and the market has reacted accordingly.”

He pointed out that traders currently expect only three interest rate cuts (75 basis points) in 2024, which is lower than Last month's forecast of 175 basis points fell sharply, but he also suggested that concerns about inflation may have become too pessimistic.

Craig Erlam said: "We have made substantial progress on inflation, and I expect to see more progress in the coming months."

Craig Erlam said. p>

He pointed out that the "bad" inflation data "came at an untimely time" for Bitcoin, allowing Bitcoin to break through $50,000 for the first time in two years. After a fall, the seven-day rising trend came to an end.

Craig Erlam added: "While there will be a short-term shock, I don't think it will dampen sentiment in the cryptocurrency space too much."