Bitcoin Holds Above $64,000 Amid US CPI and Fed Uncertainty
Bitcoin is trading around $64,000-$64,400 today, as traders await the U.S. July Consumer Price Index (CPI) release amidst geopolitical uncertainty.
The market remains sensitive to expectations for Federal Reserve policy, with a recent weak labor market report reducing expectations for a September rate hike from 50% to 48-50%. However, markets expect headline CPI to slow to around 3.4% year over year from 3.5%, which could support Bitcoin through lower Treasury yields and a softer dollar.
The eurozone backdrop is also mixed, with GDP expanding by 0.4% quarter over quarter in the second quarter, but July inflation accelerating to 2.9%. The European Central Bank (ECB) kept its deposit rate unchanged at 2.25%, warning that the inflationary impact of the Middle East energy shock has yet to fully work through the economy.
Institutional demand through U.S. spot Bitcoin ETFs remains an important source of support, with cumulative net inflows reaching $714 million since the beginning of August. However, these flows have weakened in recent days, and a return to sustained daily inflows of $100-$200 million or more would be required to provide a stronger catalyst for another leg higher.