- The Federal Reserve recently released its June CPI reports.
- However, most crypto assets, led by Bitcoin, did not react to the recent report.
The recent Consumer Price Index (CPI) report issued by the Federal Reserve has not caused the expected positive reaction from Bitcoin [BTC] price.
This outcome was particularly surprising as market observers anticipated the Fed’s rate cuts later this year, which could typically boost investment in riskier assets such as cryptocurrencies.
Possible reasons for the lack of response
As market observers anticipated the impact of the Fed’s expected rate cuts, the effects may already have been factored into current market prices.
SSince the second half of 2022, expectations of interest rate cuts have significantly affected market sentiment. This has contributed to Bitcoin’s rise to record highs above $73,000 in 2024.
When interest rate cuts are implemented, they can only provoke a lukewarm response from the market. Moreover, BTC is experiencing significant selling pressure from several angles.
Miners in particular sold their holdings following the halving and a subsequent drop in the price of BTC. This has forced them to liquidate some of their reserves.
Furthermore, the German government has been actively selling large amounts of BTC since the beginning of the month.
Market participants also kept a close eye on the potential Mt.Gox sell-off; Although these sales will likely take place over-the-counter due to the high volume, they remain a concern.
These combined factors could influence Bitcoin’s lack of response to the Fed’s rate cuts.
Read Bitcoin’s [BTC] Price forecast 2024-25
BTC’s response to possible Fed rate cuts
The analysis of Bitcoin’s price trend on a daily time frame indicated that it closed on June 11 with a decline of 0.67%. It traded around $57,348 after the CPI report was announced.
Source: TradingView
At the time of writing, BTC was trading at around $57,304, showing a slight further decline. The current price movement has been bearish. This contrasted with the expected positive reaction to the expected Fed rate cuts.