Bitcoin’s rally cools as investors digest inflation data

Deep Tide TechFlow message, July 16, according to CoinDesk: Bitcoin’s rally is cooling—up 3% over the past 24 hours but down 0.5% after midnight, while Ethereum is also pulling back by 0.5% in tandem. Polymarket data shows that expectations for the Federal Reserve to raise rates this month have dropped sharply from 34% to 6.7%. The market assigns a 93% probability that interest rates will be kept unchanged, and CME fed funds futures also indicate that the probability of a rate hike is only 14.4%.

XYO co-founder Markus Levin said the crypto market is becoming more selective in interpreting macro signals and no longer assumes that inflation automatically leads to rate cuts or new highs. Federal Reserve Chair Kevin Warsh said that a single inflation report is not enough to declare victory; with Brent crude oil prices above $85 per barrel, inflation risks are rising, and expectations that the ECB will cut rates in July have essentially fallen flat.

Market focus shifts to whether inflation can continue to cool. Bitcoin’s next move will depend on the contest between inflation and oil prices, and geopolitical factors also need to be watched.