Long

Chair

Bitcoin

Reserve

<h2 id="1-market-reactions-amidst-rate-cut-speculations">1. Market Reactions Amidst Rate Cut Speculations</h2> 
<p>Bitcoin and ether prices trended lower alongside a broader sell-off in equity markets. This downturn occurred despite inflation indicators boosting the likelihood of a U.S. Federal Reserve rate cut in September. According to the <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html" rel="nofollow noopener" target="_blank">Chicago Mercantile Exchange</a> (CME) Fedwatch tool, the probability of a rate cut increased from 68.1% on Thursday to 88.1% today.</p> 
<p>Bitcoin’s price fell 3% over the past 24 hours, trading at $57,189 at 7:51 a.m. ET. Ether and other major altcoins like Solana also saw declines of 2% and 5%, respectively. This decline was mirrored in equity indices, with the Nasdaq Composite and the S&amp;P 500 falling 1.95% and 0.88%, respectively, by the end of Thursday’s trading session. This reaction contradicts the conventional expectation that equities would rally on rate-cut signals, indicating a complex interplay of market dynamics.</p> 
<h2 id="2-impact-of-inflation-data-and-federal-reserve-s-stance">2. Impact of Inflation Data and Federal Reserve’s Stance</h2> 
<p>This week, two significant indicators suggested the possibility of a rate cut cycle beginning soon. A cooler-than-expected Consumer Price Index (CPI) reading and U.S. Federal Reserve Chair Jerome Powell’s testimony before Congress pointed to “modest further progress” on inflation. The CPI data released on Thursday showed a June inflation rate of -0.1%, against an expectation of +0.1%, bringing the year-over-year inflation down to 3.0%.</p> 
<p>Despite these positive indicators, risk assets sold off. Analysts from Presto Research noted in a Friday market report that even with the soft June CPI release, major indices like the Nasdaq were down, and Bitcoin remained flat. They attributed this to a potential rotation from leading sectors to laggards, though the true nature of this trend will be seen in the coming weeks.</p> 
<h2 id="3-market-sentiment-and-external-influences">3. Market Sentiment and External Influences</h2> 
<p>Negative sentiment in the crypto market has been linked to several external factors. The Crypto Fear &amp; Greed Index, which tracks market sentiment towards Bitcoin and crypto, has fallen to “extreme fear,” its lowest level since January 2023. This sentiment was exacerbated by Bitcoin’s failure to break above the $60,000 mark twice in the last 48 hours, suggesting potential further downside.</p> 
<p><img decoding="async" src="https://s3.cointelegraph.com/uploads/2024-07/47311b9c-e300-4b87-9690-e1f8f63b9131.png" alt="47311b9c e300 4b87 9690 e1f8f63b9131" title="Why is Bitcoin Down Today? 22"></p> 
<p>Additionally, the repayment of <a href="https://crypto.ro/en/news/mt-gox-creditors-could-wait-3-months-for-btc-and-bch-repayments/">Mt. Gox creditors</a>, which began on July 5, potentially releasing up to $8.5 billion worth of Bitcoin into the market, has weighed heavily on sentiment. Another significant factor is the German Government’s large sales of Bitcoin, transferring 16,254 BTC (worth $935 million at current prices) to market makers and exchanges recently.</p> 
<p>At the time of writing, <a href="https://crypto.ro/en/cryptocurrencies/bitcoin">Bitcoin</a> is trading at $57,499, down 23% from its all-time high reached on March 14. The interplay of inflation data, Federal Reserve policies, and external market influences continues to shape Bitcoin’s price trajectory.</p> 
<p><img loading="lazy" decoding="async" class="size-full wp-image-46318 alignnone" src="https://crypto.ro/en/wp-content/uploads/2024/07/BTC_7D_graph_coinmarketcap-2.png" alt="BTC 7D graph coinmarketcap 2" width="1200" height="800" title="Why is Bitcoin Down Today? 23"></p>

Why is Bitcoin Down Today?

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