Last night the CPI data came out. Inflation really did fall, but BTC didn’t rise—instead it kept dropping. From above $64,400 it was smashed down again to around $63,300. Damn it—where’s the good news everyone promised?
The data itself is fine.
July CPI rose 3.4% year over year, and core CPI rose 2.5% year over year. On a month-over-month basis, CPI was up 0.2%. All of it matched market expectations perfectly.
Inflation fell from 3.5% to 3.4%, and the direction is good. The probability of a rate hike in September dropped from about 47% before the data to around 45% after. US stock futures jumped straight up, and gold broke above $4,440.
But BTC didn’t follow. The reasons could be fourfold.
First, the market ran ahead of time. Didn’t you notice how before the data was even released, the price turned from weak to strong and surged without looking back? Right before the release, it was pulled from around $63,500 to above $64,400. At the time, I thought it was strange—could the late-night data be a good thing? So when the data finally came out, it only confirmed expectations. The “surprise” was already gone; the bag was already bought. After the release, it’s just profit-taking.
Second, liquidity in the crypto market is too weak. Trading volume is down to the lowest level in three years. Miners are selling, Strategy is selling, and the buy pressure from ETF inflows has been continuously absorbed away. Even if macro good news reaches crypto, it gets directly digested by the market’s internal liquidity drought.
Third, Iran stirred things up again. At the same time CPI was released, news circulated that Iran denied actively discussing extending the US-Iran memorandum of understanding. The moment geopolitical uncertainty flares up, risk appetite gets immediately suppressed.
Fourth, the CPI itself is actually not “that good.” It only met market expectations—it didn’t beat them meaningfully. Also, 3.4% inflation is still far from the Fed’s 2% target. The probability of a September hike fell a bit, but 45% is still not low. What the market wants is “certainty of no hike,” not “maybe no hike.”
In short: the good news isn’t strong enough, and selling pressure has never really stopped. When it should be able to rise, it can’t—this is the most concerning signal right now. BTC is still stuck moving around in the $62,000–$66,000 range box. When it breaks out depends on when the funding/liquidity conditions genuinely start to warm up.
The data itself is fine.
July CPI rose 3.4% year over year, and core CPI rose 2.5% year over year. On a month-over-month basis, CPI was up 0.2%. All of it matched market expectations perfectly.
Inflation fell from 3.5% to 3.4%, and the direction is good. The probability of a rate hike in September dropped from about 47% before the data to around 45% after. US stock futures jumped straight up, and gold broke above $4,440.
But BTC didn’t follow. The reasons could be fourfold.
First, the market ran ahead of time. Didn’t you notice how before the data was even released, the price turned from weak to strong and surged without looking back? Right before the release, it was pulled from around $63,500 to above $64,400. At the time, I thought it was strange—could the late-night data be a good thing? So when the data finally came out, it only confirmed expectations. The “surprise” was already gone; the bag was already bought. After the release, it’s just profit-taking.
Second, liquidity in the crypto market is too weak. Trading volume is down to the lowest level in three years. Miners are selling, Strategy is selling, and the buy pressure from ETF inflows has been continuously absorbed away. Even if macro good news reaches crypto, it gets directly digested by the market’s internal liquidity drought.
Third, Iran stirred things up again. At the same time CPI was released, news circulated that Iran denied actively discussing extending the US-Iran memorandum of understanding. The moment geopolitical uncertainty flares up, risk appetite gets immediately suppressed.
Fourth, the CPI itself is actually not “that good.” It only met market expectations—it didn’t beat them meaningfully. Also, 3.4% inflation is still far from the Fed’s 2% target. The probability of a September hike fell a bit, but 45% is still not low. What the market wants is “certainty of no hike,” not “maybe no hike.”
In short: the good news isn’t strong enough, and selling pressure has never really stopped. When it should be able to rise, it can’t—this is the most concerning signal right now. BTC is still stuck moving around in the $62,000–$66,000 range box. When it breaks out depends on when the funding/liquidity conditions genuinely start to warm up.