Bitcoin dismisses on-point CPI print as daily BTC price losses pass 3%
2024.09.11 11:04
Bitcoin (BTC) extended losses at the Sept. 11 Wall Street open as positive United States macro data failed to lift crypto markets.
BTC/USD 1-hour chart. Source: TradingView
Bitcoin gives up $56K as CPI soothes inflation fears
Data from Cointelegraph Markets Pro and TradingView followed BTC price action as a US sell-off took daily losses past 3%.
Now under $56,000, BTC/USD shrugged off the August print of the Consumer Price Index (CPI), which showed inflation slowing in line with expectations. This came in at 0.2% month-on-month and 2.5% year-on-year, data from the US Bureau of Labor Statistics confirmed.
“The all items index rose 2.5 percent for the 12 months ending August, the smallest 12-month increase since February 2021,” an accompanying press release stated.
US CPI 12-month % change. Source: Bureau of Labor Statistics
CME Group’s FedWatch Tool reflected changing market bets on how the Federal Reserve would reduce interest rates at its Sept. 18 meeting.
Odds of a smaller 0.25% rate cut stood at 85% at the time of writing, while the day prior, the figure was 66%.
Fed target rate probabilities. Source: CME Group
Despite this, Bitcoin traders appeared in no mood to celebrate what would be the first US rate cut since 2020.
POpular trader Roman confirmed that he was waiting for a retest of $55,000, while social media commentators also noted liquidity building nearer $54,000.
Data from monitoring resource CoinGlass additionally showed asks increasing at $57,000 and above.
Binance BTC/USDT Liquidation Heatmap (screenshot). Source: CoinGlass
Only longer timeframes offered cause for optimism. Fellow trader Titan of Crypto, uploading Ichimoku cloud data to X, showed the weekly chart for BTC/USD still holding support.
BTC/USDT 1-week chart with Ichimoku cloud data. Source: Titan of Crypto/X
BTC price action signals “risk-averse environment”
In its latest weekly report sent to Cointelegraph, meanwhile, onchain analytics platform CryptoQuant warned that Bitcoin had abandoned its correlation to gold.
Related: Is crypto entering a bear market? — 5 Things to know in Bitcoin this week
BTC price action contrasted significantly with XAU/USD in August, as the latter set a new all-time high in dollar terms.
“Bitcoin has decoupled from gold. Bitcoin prices have declined at the same time gold prices have reached a fresh record high, causing correlation between them to turn negative,” it wrote.
“A period of negative correlation between Bitcoin and gold, with gold increasing and Bitcoin decreasing, typically signals a risk-averse environment where investors favor traditional safe-haven assets like gold. In turn, Bitcoin has followed the stock market to the downside.”
Bitcoin vs. gold correlation (screenshot). Source: CryptoQuant
CryptoQuant additionally flagged dollar strength decreasing in step with Bitcoin — an uncommon state of affairs.
“Both, a weakening dollar and declining Bitcoin, could signal broader risk aversion or financial stress, even though the dollar is losing strength against other major currencies,” it argued.
“This might happen in periods when global markets are facing uncertainty, leading investors to flee from riskier assets like Bitcoin while also moving away from the US dollar.”
Bitcoin vs. US dollar index (DXY) correlation (screenshot). Source: CryptoQuant
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.
