Inflation Figures Sink Bitcoin's Short-Term Prospects

The latest US consumer price index (CPI) data has been released, and it's not looking good for Bitcoin. According to CoinShares, the figures were in line with expectations on headline inflation, but core inflation remained slightly above forecasts.

This news increases the likelihood of a Fed interest rate hike in September and strengthens the risks that monetary policy may remain tight for a longer period. Markets had viewed weaker inflation data as a potential catalyst for Bitcoin to sustain a move above the $80,000 level, but this latest CPI data did not meet that expectation.

CoinShares notes that mutual fund flows are also weakening market sentiment, with a net outflow of $243 million recorded so far this week. For Bitcoin to make a stronger and more sustained move above $80,000, weaker economic data or a more dovish policy shift from the Fed may be needed.