• Bitcoin price rejected the CPI boost as market odds for a Fed rate pause near 95%.
• The US Consumer Price Index (CPI) came in below expectations, however, crypto markets remained cautious.
• Per CME Group’s FedWatch Tool, bets on the Fed pausing its rate hike cycle have climbed following the CPI event.
Bitcoin Price Rejects CPI Boost as Market Odds Near 95%
Bitcoin BTC $26,000 fell back in line at the June 12 Wall Street open after a brief macroeconomic data jolt failed to shift the status quo. Data from Cointelegraph Markets Pro and TradingView showed BTC/USD continuing to circle $26,000, avoiding major volatility.
US Consumer Price Index
The largest cryptocurrency saw a brief spike toward $26,500 on the back of the latest United States Consumer Price Index (CPI) print, which came in below expectations. While ostensibly a boon to risk assets, crypto markets remained cautious on the day, with comments from the Federal Reserve and further macro prints due in the coming days.
Fed Rate Hike Cycle
Bets on the Fed pausing its rate hike cycle on June 14 after the meeting of the Federal Open Market Committee (FOMC), meanwhile, climbed following the CPI event. At the time of writing, per CME Group’s FedWatch Tool,the odds stood at over 90%, having started out at 75%. Financial commentator Tedtalksmacro commented “Disinflation continues! Headline CPI prints at +4.0% YoY which now takes 3-month annualised rate to +2.21%. The Fed has long targeted 2.0%. PAUSE.”
Easing Financial Conditions
Trading firm QCP Capital believes that consensus has it right — that Fed will not raise rates further — at least this time based on high frequency indicators of US inflation falling rapidly and massive melt-up equity rally playing at back of their minds when considering their decision.
Lack of Volatility
Multiple commentators noted that BTC/USD had closed gap in CME Bitcoin futures from weekend yet were unable to muster any kind of significant move in either direction despite macroeconomic news releases being generally positive for risk assets like cryptocurrencies.