Bitcoin Fails to Rally on Cooling Inflation Amid Market Shift
Despite the latest US inflation data indicating a cooling trend, Bitcoin's price has stagnated. According to CryptoQuant contributor XWIN Japan, this lack of upward momentum can be attributed to weak spot buying, thin liquidity, and an overhang of leveraged positions.
The analysis points out that investors often view cooling inflation as a bullish signal for risk assets like Bitcoin, as it may prompt the Federal Reserve to ease monetary policy. However, the current market structure is not responding to macroeconomic cues as it once did.
XWIN Japan notes that spot buying pressure has declined significantly, meaning demand from investors purchasing Bitcoin directly has not been sufficient to absorb selling activity. Thin liquidity has exacerbated the situation, making the market more susceptible to sharp price swings and reducing the depth needed for a sustained recovery.