Bitcoin Tuesday’s rally fizzled out as investors felt that a weaker-than-expected U.S. inflation figure was not enough to trigger an interest rate cut from the Federal Reserve.
While still 3% higher in 24 hours, the largest cryptocurrency is down 0.5% since midnight. Ether (ETH), which rose 4.7% in 24 hours, also fell 0.5%.
At Polymarket, the perceived odds of a rate increase fell from 34% to 6.7% after the data was released. Bettors now weigh a 93% chance that the Fed will leave rates unchanged this month, and CME’s FedWatch shows that 30-day fed funds futures prices indicate just a 14.4% chance of an increase.
“Cryptocurrency’s reaction to the latest CPI report shows that the market is becoming more selective in how it interprets macro signals,” Markus Levin, co-founder of XYO, told CoinDesk. “While falling inflation reduces pressure on markets and improves the outlook for risk assets, traders no longer assume that every favorable inflation data will automatically lead to rate cuts or new record highs.”
