Bitcoin Falls Below $63,500 as US Inflation Data Sends Rate Hike Odds to 60%

Bitcoin's price has taken a hit after US inflation data for July came in line with expectations, leaving some market analysts wondering if this will impact the Federal Reserve's plans to raise interest rates. The Consumer Price Index (CPI) rose 0.1% month-on-month and 3.4% year-over-year, which is not surprising given last June's unexpected drop. This has led to a slight decrease in the odds of a rate hike at the September Fed meeting, now standing at 60%, according to CME Group's FedWatch Tool.

The cooling CPI combined with weak labor-market figures may bolster the case for the Fed avoiding interest-rate hikes, which would be beneficial for crypto and risk-asset liquidity conditions. However, market volatility is still on the horizon as Thursday brings the release of the July Producer Price Index (PPI) numbers, which could have significant implications for markets.

Bitcoin's price has been struggling to hold above $63,500, with some analysts warning that this support level is progressively weakening. Rekt Capital pointed out that each bounce from $63,000 has been lacking in trajectory, and at some point the bounces will become so weak that the floor will simply break.