Bitcoin Falls Despite Soft Inflation Data, Rate Hike Odds Still High
The recent soft inflation data released in July has not had the expected impact on Bitcoin's price. Despite consumer prices cooling to 3.4% and producer prices coming in unchanged, Bitcoin fell from an intraday high of $65,234 to $63,304 after the consumer numbers.
One reason for this lackluster response is that buyers waiting on the sidelines are not yet ready to buy. According to Glassnode, a weak reaction to good news is often a sign that the market is short of buyers rather than reasons to buy.
The odds of a September rate hike have fallen to 32%, but traders still expect tightening policy by year-end at near 70%. This means that while the short-term pressure has eased, the market expects rates to go up before December.
Miners are selling Bitcoin due to better opportunities from renting out computing power to AI companies. Strategy has also been selling, with a total of 6,948 BTC sold this year at an average price of $64,262. The biggest holders, however, have been buying through all of it, adding supply while miners and corporate treasuries sell.