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Bitcoin Drops Below $49,000 Amid Higher-Than-Expected US Inflation

14/02/2024 16:16

According to CoinDesk, Bitcoin fell below $49,000 after the January Consumer Price Index (CPI) report showed a 3.1% annual inflation rate, higher than analysts' forecasts. The largest cryptocurrency by market capitalization slipped about 2% to $48,700 from slightly above $50,000 earlier in the day. Market participants now see only a 34% chance of the Federal Reserve cutting interest rates in May, down from 52% a day ago, according to the CME FedWatch Tool. The lower chance of imminent rate cuts weighed on traditional markets as well, with the 10-year U.S. Treasury bond yield advancing 12 basis points and the S&P 500 equity gauge and the tech-heavy Nasdaq Composite Index declining as much as 2%. Craig Erlam, senior analyst at online brokerage platform OANDA, said in a Tuesday note that the 'nasty' inflation reading came at an unfortunate time for Bitcoin and 'rug-pulled' its rally just when it broke above the $50,000 level on Monday for the first time since December 2021. 'While damaging in the short run, I don't think it will dampen the mood in the crypto space too much,' he added. Cryptocurrencies later pared some of the declines, with Bitcoin recovering to $49,100, but most of the broad-market crypto index CoinDesk 20 (CD20) constituents were still down 2%-3% over the past 24 hours.

Bullish

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