Bitcoins Tuesday’s rally fizzled out as investors believed a weaker-than-expected US inflation figure was not enough to prompt a rate cut by the Federal Reserve.
While still up 3% over 24 hours, the largest cryptocurrency is down 0.5% since midnight. Ether (ETH), up 4.7% in 24 hours, has also retreated 0.5%.
At Polymarket, the perceived odds of a rate hike fell from 34% to 6.7% after the data came out. Bettors are now weighing a 93% chance the Federal Reserve will leave rates unchanged this month, and CME’s FedWatch shows 30-day fed funds futures prices indicating just a 14.4% chance of a hike.
“Crypto’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 any favorable inflation will automatically lead to rate cuts or new record highs.”
