The slowdown in US inflation isn't bothering bitcoin. But why should it?

On September 11, the U.S. Labor Department released the Consumer Price Index (CPIAn economic indicator used to assess inflation levels and guide monetary policy decisions.) for August 2024. This metric dropped by 0.4%, reaching an annual rate of 2.5%. This marks the largest decline in inflation for 2024. In comparison, in July, it decreased from 3% to 2.9%.

Despite the easing of inflation, Bitcoin's price showed little reaction to this news, even though changes in the CPI have typically influenced the crypto market overall and Bitcoin specifically. At the time of the announcement, the value of BTC was $57,504, compared to its all-time high of $73,738.

The relationship between the CPI and the prices of Bitcoin and other cryptocurrencies is not always direct and clear, as it depends on various factors including investor sentiment, new technologies, regulatory actions, and global economic conditions. The current lack of significant response to the slowdown in inflation in the U.S. may be attributed to expectations of interest rate cuts by the Federal Reserve, which are raising concerns among investors. The decision will be announced on September 17-18.

Source: Lookonchain, Bureau of Labor Statistics