Bitcoin Falls Further as Inflation Data Lowers Rate Cut Potential
Bitcoin's price is falling amid tough inflation and no news of an incoming interest rate cut, but should investors worry?
Quick overview
- Bitcoin (BTC) is currently priced at $115,134, slipping below its key support level of $119K amid ongoing inflation concerns.
- Analysts attribute Bitcoin's decline to persistent inflation and diminishing hopes for an interest rate cut from the Federal Reserve.
- Despite the current dip, Bitcoin remains above the psychologically significant $100K mark, and there are potential catalysts for a price rebound this week.
- Positive developments in the stock market and upcoming retail earnings reports could provide a boost to Bitcoin's price.
Live BTC/USD Chart
Slipping further from its key support level, Bitcoin (BTC) is now at $115,134 (BTC/USD) and could drop even further before it is finished with its bear run.
Analysts blame sticky inflation and decreasing rate cut hope on the current state of Bitcoin, which fell to $114K on Monday and is way below its recent support level of $119K.
BTC/USDRecent inflation data shows that the overall rate of increase has held steady compared to the previous month- at 2.7%. but there has been no decrease, which was what the Federal Reserve was looking for in order to institute an interest rate cut. That means that the market may need to wait longer for a rate cut to happen. As consumer prices rise, investors are faced with the very real problem of tightening budgets, higher costs, and less disposable income to work with in their investments.
That leaves Bitcoin and other cryptocurrencies to dip in the wake of rising inflation fears. While the stock market is enjoying weeks of gains, the crypto market is looking less hopeful.
Where Will Bitcoin Go from Here?
It is both good news and bad news that Bitcoin is near its one-month low. This decline gives investors a chance to buy in during the dip and potentially make incredible profits in the coming weeks. Bitcoin has been very resilient this year and has managed to stay above $100K for months. No one expects it to dip below that psychologically important threshold for now, especially since the contributing factors to Bitcoin decline have been relatively mild.
There is not a strong inflation increase pulling BTC’s price down, nor is there confirmation from the Fed that no rate cuts are coming for now. So, if inflation improves or the Fed announces a rate cut, then Bitcoin’s price is certain to turn around very quickly. The BTC rate could also improve greatly if there is positive news out of Monday’s meeting between Donald Trump and Ukrainian President Volodymyr Zelensky.
Bitcoin could also receive a boost from the powerfully positive stock market performance we are seeing now, with the Nasdaq and S&P 500 flirting with all-time highs still. This week will be a busy one for retail earnings reports, and if those reports look good and beat Wall Street expectations, then Bitcoin could see a price jump due to that factor as well.
There are a lot of ways that Bitcoin could turn things around this week and few that would be likely to pull it down even further. Investors might be wise to buy the dip now and reap the rewards in the coming days.
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