Bitcoin sees second day of decline
The price of Bitcoin continued to decline for a second day, despite an uptick in major equities. While the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all saw gains in early trading, Bitcoin slumped lower by over 1.3% to trade at $41,283.
CPI rises 3.1% in November, as expected
The U.S. Bureau of Labor Statistics reported that the consumer price index (CPI) rose 0.1% in November and increased by 3.1% compared to the previous year. The core CPI, which excludes volatile food and energy prices, also increased by 0.3% on the month and 4% from a year ago. These figures were in line with expectations but still above the Federal Reserve’s 2% inflation target.
Possibility of continued Fed rate pause
Market expectations suggest that the Federal Reserve will announce another rate pause at its upcoming meeting. This decision could have an impact on both traditional markets and the cryptocurrency sector. Previous rate pauses have resulted in positive market movements for cryptocurrencies, as steady or lower interest rates create a more optimistic investment environment.
Inflation is still ‘entrenched’
Some analysts believe that U.S. inflation is becoming “entrenched” and predict that the Federal Reserve may need to hike rates again in 2024. With services sector inflation on the rise and a hot labor market, it is expected that inflation could spike to 3.5% in December. The CME FedWatch tool currently indicates a 98.5% probability of a rate pause at the upcoming FOMC meeting.
Hot Take: Bitcoin price continues to decline despite equities uptick
The price of Bitcoin experienced a second consecutive day of decline, dropping over 1.3% to trade at $41,283. This decline occurred despite gains in major equities such as the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite. The U.S. Bureau of Labor Statistics reported that the consumer price index (CPI) rose in line with expectations, increasing by 0.1% in November and 3.1% compared to the previous year. The possibility of a continued rate pause by the Federal Reserve has been anticipated, which could impact both traditional markets and the cryptocurrency sector. However, some analysts believe that inflation is becoming “entrenched” and predict further rate hikes in the future.
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