- Bitcoin dipped below $63,500 on Wednesday after US inflation data matched expectations, frustrating bulls hoping for a rally.
- Fed rate-hike odds cooled further as markets shift focus to Thursday’s Producer Price Index (PPI) report for more volatility cues.
- Analysts warn that BTC’s $63,000 support is “progressively weakening,” with each bounce losing momentum.
Bitcoin (BTC) weakened around Wednesday’s Wall Street open, dipping below $63,500, as markets absorbed US inflation data that matched expectations, according to TradingView charts. The July Consumer Price Index (CPI) came in at 0.1% month-on-month and 3.4% year-on-year, a relief after June’s surprise downside but insufficient to boost risk assets.
Consequently, the odds of the Federal Reserve holding rates steady at its September meeting rose to 60%, up from 30% a month ago, as tracked by the CME Group’s FedWatch Tool. An in-line CPI print, combined with last week’s weak jobs report, points to gradual cooling without triggering a recession scare, said Fabian Dori, CIO at Sygnum Bank.
However, the Bitcoin options market still prices a “material premium” for downside protection, noted Andrei Grachev, managing partner at DWF Labs. Downside strikes near $60,000 cost more than upside strikes near $70,000 on the end-August expiry, a skew that could ease after Thursday’s PPI release.
Meanwhile, trader and analyst Rekt Capital warned in a post on X that BTC’s $63,000 support is “progressively weakening.” Each bounce from that level has diminished—from 6.27% to 1.15%—suggesting the floor could break entirely. Bitfinex Alpha echoed the caution, noting that Bitcoin met resistance at the $65,000–$65,500 region six times between August 5 and 10, failing to record a single daily close above that zone since July 26.
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