Bitcoin Tumbles Below $63K as Fed Rate Odds Surge to 60%
Crypto traders are closely watching inflation data and Federal Reserve rate expectations after the US July Consumer Price Index (CPI) came in line with forecasts. This has led to a softer market for Bitcoin, which fell below $63,500 despite earlier gains.
The FedWatch Tool from CME Group indicates that there is now a 60% probability that the Federal Reserve will hold interest rates at their current range of 3.50%-3.75% in September, up from 30% a month ago.
Market participants are waiting for Thursday's Producer Price Index (PPI) report to see if inflation momentum is truly cooling or merely pausing. This could provide clarity on whether the Fed will continue to tighten monetary policy.
Some analysts believe that the recent labor-market signals and weaker July CPI data may strengthen the case for the Fed to avoid additional rate hikes, which would be supportive for liquidity conditions benefiting crypto and other risk assets.