Bitcoin’s Bumpy Ride: Inflation Strikes Again!

by

Well, here we are again, folks. Bitcoin, that digital darling of the investment world, is trading below nearly five percent from Monday’s record peak. It’s like the cryptocurrency version of a roller coaster, but without the fun. After the second consecutive monthly rise in US consumer prices, the air of uncertainty has returned, and it’s as thick as a fog in San Francisco. The benchmark cryptocurrency was recently quoted around $116,800, down from the all-time high above $123,000 set 24 hours earlier. 📉💰

The June Consumer Price Index (CPI) rose 0.3 percent on the month and 2.7 percent year on year, exactly matching the headline forecast but marking the fastest annual pace since February. Core CPI increased 0.2 percent on the month and 2.9 percent on the year, undershooting consensus by a tenth of a point on the monthly print but in line with the annual rate. It’s like the economy is playing a game of “how close can we get to the target without actually hitting it?” 🎯

Wall Street Journal’s Nick Timiraos wrote on X that the figures were “close to consensus” but “not as mild as May,” noting that “Core prices rose 0.23% in June… Headline prices rose 0.29%.” It’s like the economy is saying, “Sure, I’ll be a little bit more expensive, but not too much, okay?” 😅

The data hardened the conviction of some analysts that the Fed will stay on hold. “We now have: 1) CPI inflation rising for 2-straight months to its highest since February 2025, 2) a ‘strong’ labor market beating expectations for 3-straight months, 3) new tariffs set to go live on August 1st. Fed Chair Powell is NOT cutting rates,” wrote macro newsletter The Kobeissi Letter. It’s like the Fed is playing a game of “I’m not touching that” with the rate cuts. 🙅‍♂️

Christopher Inks of TX West Capital echoed that stance: “CPI data is giving the Fed reasons not to cut rates. CPI has risen two months in a row now.” It’s like the Fed is saying, “Nope, not today, and probably not tomorrow either.” 🙅‍♀️

Bitcoin And Crypto Tumble As Inflation Fires Up

Still, some crypto-focused traders described the release as broadly balanced. “CPI coming in mostly according to estimates… Core a bit lower, CPI a bit higher. Not much going on here. As always, the more important thing is how the market reacts and digests the data today,” said Daan Crypto Trades. It’s like the market is a teenager who’s been told to clean their room: they know what to do, but they’re not sure they want to do it. 🤔

Andreas Steno Larsen, founder of Steno Research, argued that the mix of rising goods prices and moderating services inflation may be constructive for risk assets: “June CPI confirms our view: goods are quietly starting to reinflate, but disinflation in services and housing still dominates the overall picture… Ideal setup for a portfolio long tech/crypto, commodities, and reflation FX.” It’s like the economy is a puzzle, and we’re all trying to figure out which piece fits where. 🧩

Others were less sanguine. “What do you know. Inflation still stuck. The Fed pause continues and the larps screaming for rate cuts everyday continue to look stupid… HIGHER FOR LONGER,” posted the chart-technician Charting Guy. It’s like the Fed is a stubborn mule, and no amount of yelling will make it move. 🐴

Treasury markets reacted with a modest rally: the 10-year yield surged to 4.475 percent after the report, while the US dollar index shot above the 98.5 level. Interest-rate futures continue to price roughly 52 percent odds of the first Fed cut coming at the September meeting, according to CME FedWatch data. It’s like the market is a weather vane, and the Fed is the wind. 🌬️

At press time, Bitcoin traded at $116,175. It’s like the price of a ticket to the moon, but with more volatility. 🚀

Read More

2025-07-16 06:48