Bitcoin Shrugs Off Slightly Cooler Inflation Print

US inflation for July came in at 0.1% month-over-month and 3.4% year-over-year, according to the Bureau of Labor Statistics. This was largely due to shelter prices rising 0.1%, accounting for two-thirds of the monthly increase. Energy costs dropped 1.5% as gasoline prices fell.

The Federal Reserve watches a closely related measure, the strip inflation rate, which rose 2.5% year-over-year after stalling in June. A cooler-than-expected inflation print would normally signal a dovish Fed, potentially making Bitcoin more attractive to investors. However, markets had already priced this outcome weeks ago.

The resulting market reaction was muted: Bitcoin ticked up about 0.3% to roughly $63,750, while total crypto market cap slipped under 1%. This lack of response might be due in part to the fact that inflation is still above the central bank's target of 2%, and investors had already factored in a tame print.

Investors' expectations were also reflected in spot Bitcoin ETFs, which pulled in $854 million over five straight sessions last week as rate-hike bets faded. The current trend strength for Bitcoin remains weak, with the 50-day average sitting below its 200-day average and trading pinned between about $62,000 support and $67,000 resistance.