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Bitcoin’s rally fades as traders weigh cooler US inflation and oil

CoinDesk reported that Polymarket cut perceived odds of a Fed rate increase from 34% to 6.7% after the data, while investors now largely price a hold this month.

Reported · Written up by our desk · Market Structure

Bitcoin’s rally lost steam as investors digested a weaker-than-forecast US inflation reading, with CoinDesk’s Daybook noting the update did not revive expectations for a Federal Reserve rate cut. Bitcoin was about 3% higher over 24 hours at $64,649.46, but it fell 0.5% since midnight, while Ether rose 4.7% over 24 hours before also pulling back by 0.5%.

CoinDesk said markets shifted quickly in rate expectations, with Polymarket odds for a rate increase dropping from 34% to 6.7% after the inflation figures. Bettors now assign a 93% chance the Fed will keep rates unchanged this month, and CoinDesk pointed to CME FedWatch data showing just a 14.4% chance of an increase based on 30-day fed funds futures prices.

The newsletter highlighted that attention is moving to whether inflation can keep cooling without rebounding, while more US data is due next. CoinDesk cited Fed Chair Kevin Warsh’s view that one favorable inflation report is not enough to declare victory, and it added that additional releases including US producer prices and later-month PCE will likely drive the next read-through for crypto.

CoinDesk also tied the outlook to energy and geopolitics, noting Brent crude was above $85 a barrel and that a July rate cut from the European Central Bank is effectively off the table. It added that oil and gas flow concerns, alongside incoming inflation data, remain key drivers for bitcoin’s next move.

Latest closeWTI crude $79.90 ▲2.2%|Brent $85.36 ▲2.5%|Bitcoin $65,260.12 ▲0.5%

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