Bitcoin Price May Be Limited by Inflation Fears and Fed Rate Hike

CoinShares has assessed the latest US consumer price index (CPI) data and its implications for Bitcoin. The company notes that headline inflation was generally in line with expectations, while core inflation remained slightly above forecasts.

This picture increased the likelihood of a Fed interest rate hike in September, strengthening the risks that monetary policy may remain tight for a longer period.

CoinShares stated that markets viewed weaker inflation data as a potential catalyst for Bitcoin to sustain a move above the $80,000 level. However, the latest CPI data did not meet this expectation, limiting the short-term upside potential of the cryptocurrency market.

The company also pointed out that mutual fund flows indicate weakening market sentiment, with a net outflow of $243 million recorded so far this week after approximately $1.3 billion flowed into digital asset investment products last week.