The cryptocurrency market is giving back the gains accrued on Wednesday following the release of inflation data in the US. After touching $70,000 Bitcoin price lost ground to below $67,000. Many top analysts believe that if BTC slides below the $66,000 level, the downfall could continue to $64,000.
Altcoins are also in the red led by Ethereum, Solana, XRP, and more. According to CoinGecko price data, ETH is down by 4.4% to $3,450, SOL by 7% to $147, and XRP by 3% to $0.48.
Meme coins have not been spared, with Dogecoin and Shiba Inu leading the drop among major cryptos. DOGE is pushing down on support at $0.14 after abandoning a potential rally to $0.2. Shiba Inu risks sliding below the key support at $0.00002 but hovered at $0.000021 on Thursday.
Why Is Bitcoin Falling As DOGE, SHIB Tumble
Inflation data in the US, particularly the Consumer Price Index (CPI), came in softer than expected on June 12. Bitcoin and altcoins to buy reacted bullishly after a gruesome drop to $66,000 on Tuesday.
However, the hawkish stance of the Federal Reserve following the FOMC meeting on Tuesday and Wednesday cost bulls a trip above $70,000. Pouring water on investor expectations, Jerome Powell the Fed chair said that the central bank is not comfortable with interest rate cuts at the moment.
The remarks came alongside the decision to leave the rates unchanged in the range of 5.25% and 5.5% and the revision of the interest rate cuts from the previously projected 3 to only one.
According to the members of the FOMC, the central bank has made a modest move towards an inflation target of 2% but remained adamant about cutting rates. Inflation in the US has eased from peak levels experienced in 2022 and 2023.
Powell said that he is confident with the impact of the restrictive policy adding that its sufficiency will be known in time.
PPI Inflation Data Fails To Ignite Bitcoin Bulls
The Producer Price Index (PPI) data in the US proved that inflation is easing, after beating economists’ expectations. Slowing inflation is a good sign for risky assets like crypto and stocks.
Nevertheless, Bitcoin and crypto prices failed to regain momentum giving control back to bears. According to experts from QCP Capital, a trading company, investors seem confused over the future outlook of the market, especially with the Fed remaining hawkish regarding interest rate cuts.
The analysts are looking forward to “a rate cut in September, with the FED likely adopting a wait-and-see approach for subsequent meetings in November and December.”
On the other hand, the approval of spot Ethereum ETFs could offer a modest distraction from interest rates and possibly build a bullish macro outlook in the short-term to the long-term.
Bottom Line
The next few days would be important for Bitcoin and altcoins. If key support areas are respected, a stronger rebound could emerge. Meme coins like Dogecoin and Shiba Inu tend to rally alongside Bitcoin and are worth watching out for.
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