markets, recession, rates, jobs, powell, inflows, DXY
The US Consumer Price Index in June rose by 3% year-over-year, slightly below the market consensus of 3.1%. Analysts claim that this CPI release was bullish for Bitcoin is"one step closer to a September rate cut,” especially after real average hourly earnings for workers slowed 3.9% from the prior year, according to a Bureau of Labor Statistics report. Additionally, the labor force participation rate slightly increased to 62.6% in June from 62.5% in May.
Despite data pointing to higher odds of rate cuts, with consensus surpassing 90% odds of at least one 0.25% rate cut by September, Bitcoin’s price remains pegged below $60,000. Meanwhile, the S&P 500 stock market index is 0.5% below its all-time high, and gold, the market’s preferred store of value, is trading 1.2% below its $2,450 record high from May 2024. Even the Russell 2000 small cap index, which excludes the 1000 largest US-listed companies, rose 3% on July 11.
Given the constructive view of traditional finance, investors struggle to find explanations for Bitcoin’s lack of bullishness. This decoupling is especially worrisome given that spot Bitcoin exchange-traded funds capturedTo make things worse, the DXY index, which measures the US dollar against a basket of foreign currencies, declined to its lowest level in five weeks at 104.4. This suggests investors are not seeking shelter in cash positions, which could partially explain Bitcoin’s bearishness.
Bitcoin’s underperformance can be attributed to three factors. The first is the FUD stemming from the ongoing sale by the. Nearly 50,000 BTC, originally seized from a 2013 pirated movie website, are being disposed of by authorities, either being sent to exchanges or known market makers. According to Arkham Intelligence, there are now fewer than 5,000 BTC left for sale.Another source of uncertainty comes from Bitcoin miners.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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