- Bitcoin drops below $60K amid rising inflation concerns and higher-than-expected Consumer Price Index data.
- The broader crypto market followed suit, with major coins like Dogecoin and Ethereum also falling.
- Investors’ caution grows as the likelihood of a 0.5% interest rate cut at the next FOMC meeting diminishes.
The world’s largest cryptocurrency by market capitalization, Bitcoin, saw a slight decrease in value on Thursday. Over the past 24 hours, BTC lost its $60,000 margin – losing 2.33% in the process.
Furthermore, the currency that had been riding a relatively strong upward momentum during the week – with its highest peak at $64,197 on October 7th – fell by over 7% since, currently trading at $59,623 according to CoinMarketCap.
This market movement followed suit among all the top 10 cryptocurrencies by market capitalization. Dogecoin stands as the biggest loser of the bunch after seeing a detraction of over 4.2% in value over the last day, while Ethereum lost around 2%.
Why Crypto is Down Today
The market retraction on Thursday coincides with the release of the U.S. Consumer Price Index data from September. The report shows that American inflation grew more than the formerly predicted 0.1% range, at 0.2%.
This inflation data from a 12-month period shows a 2.4% increase. This data may come as a surprise after last week’s Labor Report showed a significant increase in jobs created in August. Also, energy costs saw a decrease of over 7% in September after oil and gas prices went down.
Overall American inflation still looks to be under control and on its way down. However, the fact that CPI data shows a larger-than-expected increase is enough to create volatility in the market for riskier assets.
Moving forward, this inflationary uptick also means that another upcoming 0.5% interest rate cut at the upcoming FOMC meeting in November will likely be out of the picture. As American interests are still considered to be high – this tighter monetary policy is enough to make investors more risk-averse given the costlier borrowing and reduced liquidity in the market.
That being said, even a 0.25% interest rate decrease would not count as bad news for Bitcoin and other digital assets. At this time of writing, $BTC appears to be recovering part of its losses and could be on its way to regaining the $60,000 margin. Overall, the long-term forecast for Bitcoin remains positive – its year-long chart still shows overwhelmingly bullish signals, and its potential as a digital hedge against inflation could continue to drive interest toward the currency.
