Cryptos ignore the US CPI; Bitcoin moves away from $31,000

When it comes to silver, digital assets have completely moved on from the US June inflation data. Yesterday's CPI reading boosted gains in European and US markets, but was unable to carry over to cryptocurrencies which, after a timid attempt to rise (Bitcoin set intraday highs at $30,959), ended the day far from this target.

For Craig Erlam, senior market analyst at OANDA, "there's been a lot of volatility in Bitcoin in the aftermath of the US inflation release but in terms of sustained direction, not much appears to have changed." "The price remains extremely choppy so that may not be the case an hour from now, let alone by the end of the day. Traders, as it stands, seemingly can't make up their mind if it's good or bad for crypto,'" the expert added.

The truth is that US inflation surprised markets on the downside. The consensus estimate was for a significant drop to 3.1% from May's 4%, but the index finally came in at 3% year-on-year. The underlying rate also fell to 4.8% from the 5% estimated by market observers and lower than the previous 5.3%.

Naeem Aslam, head of analysis at Zaye Capital Markets, stated, "this is the best news for the markets so far this year when it comes to the US CPI data." "This is the lowest number since the pandemic, and this is certainly good news for the economy, but it is important to keep in mind that this is still a transitory situation. But overall, traders are cheering this event," he added.

However, the data may not be enough for the Federal Reserve (Fed). Many analysts point out that, despite this data, other indicators such as rising wages give the central bank sufficient grounds to raise interest rates on July 26. So much so that CME's FedWatch tool gives a 92% probability of a 25 basis point hike. According to experts at Oxford Economics, the good inflation reading "has set the Fed up for a policy error," as the agency "has painted itself into a corner as Fed officials' communication has signalled that another rate hike this month is essentially a slam dunk."

However, experts also believe that the June CPI could mark a turning point for Powell and his staff. Now, the consensus expects no further hikes for the remainder of the year, as the "soft landing" that U.S. central bank officials had hoped to achieve appears to be taking shape.

"But that may well now be the last and if we can see any further signs of progress over the summer then that will likely end the debate altogether, shifting the conversation from how many more hikes to the timing of the first cut," Erlam explained.

In other market news, there´s little movement. Highlights include rises of around 2.7% for Litecoin (LTC) and declines of 2.3% for Cardano (ADA).