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Bitcoin stabilized on Monday after experiencing a sharp decline over the weekend, which saw the cryptocurrency retreat from recent highs. Investors are now keen

Bitcoin

Inflation

Bitcoin Price Steadies Ahead of Fed Meeting and CPI Data

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Image credit: Frederick Warren

Bitcoin stabilized on Monday after experiencing a sharp decline over the weekend, which saw the cryptocurrency retreat from recent highs. Investors are now keenly focused on upcoming signals regarding U.S. interest rates.

Key Points:

  1. Recent Price Movement:

    • Bitcoin hit a high of $72,000 last week, approaching record levels seen in March.
    • The cryptocurrency then experienced significant profit-taking and fell as the dollar strengthened.
    • As of 02:04 ET (06:04 GMT) on Monday, Bitcoin was up 0.3% over the past 24 hours, trading at $69,534.4.
  2. Impact of U.S. Economic Data:

    • The decline over the weekend followed a hotter-than-expected nonfarm payrolls report, prompting traders to reconsider their expectations that the Federal Reserve would cut rates in September.
    • The stronger dollar, influenced by the payrolls report, exerted pressure on broader crypto prices.
  3. Upcoming Federal Reserve Meeting:

    • The Fed is widely expected to maintain current interest rates at the conclusion of its two-day meeting on Wednesday.
    • However, the Fed's forward guidance on rates will be scrutinized closely by investors.
  4. Consumer Price Index (CPI) Data:

    • CPI inflation data, due on Wednesday, is expected to show inflation remaining well above the Fed's 2% annual target.
    • Persistently high inflation could diminish the likelihood of rate cuts in the near future, affecting Bitcoin and the broader cryptocurrency market negatively.
  5. Market Outlook:

    • High-for-longer interest rates are typically unfavorable for Bitcoin and other cryptocurrencies, which benefit from increased liquidity and loose lending conditions.

Discounted Cashflow API Get the discounted cash flow (DCF) valuation for a company, a method to estimate the value of an investment based on its expected future cash flows. link: https://site.financialmodelingprep.com/developer/docs#valuation

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