While Bitcoin was not affected by the positive atmosphere in the markets after the US inflation came in below expectations, experts point out that one of the reasons for this is the claim that some of the Bitcoins seized by the USA will be sold.
As Bitcoin missed a rally in global markets triggered by falling US inflation, this has resulted in a cautious approach to the digital asset’s outlook.
As inflation in the US markets came in below expectations, rising pricing that the Fed’s monetary tightening was coming to an end caused stocks and bonds to rise, while the largest digital asset lost 0.7 percent compared to the previous day.
Bitocin followed a flat course this month after the sharp rise it experienced in June, after Blackrock, one of the largest companies in the investment market, started for an exchange-traded fund to invest in digital assets in the spot market.
Investors are assessing whether Bitcoin still has room to rally for the next period after its 83 percent rise this year.
Tony Sycamore, Market Analyst at IG Australi, said, “Bitcoin has been the asset left out of the pervasive risk-seeking that has occurred in almost every asset class after the US inflation data. In my opinion, this is not a good sign.”
Sycamore stated that the probability of a drop to $25,000-26k, which is roughly the 200-day moving average region, is increasing.
The claim that the Bitcoins seized by the USA will be sold
On the other hand, crypto analysts evaluated the quiet performance of the digital asset after inflation data, noting that among the possible reasons for this could be speculation that the US may be ready to sell some of the seized Bitcoin.
“The disinflationary environment that has emerged in the wake of relatively aggressive rate hikes should be good for risky assets, including crypto,” said John Toro, Head of Commerce, digital asset exchange Independent Reserve. However, rumors that Bitcoin seized by the US is circulating, which has led some to point to the risk of these assets being sold, has damaged confidence in the market.”
Inflation in the US fell to a two-year low of 3 percent on Wednesday, supporting increases of more than 1 percent in global equities, bond gauges, gold and oil.
Dollar index also saw the lowest level in 15 months.
Bitcoin and other cryptocurrencies lost ground
Bitcoin and the indicator of 100 digital assets have lost ground in contrast to the apparent mood experienced in other asset classes. Some forecasters think it’s only a matter of time before the biggest digital asset starts to partially recover from the drop in 2022.
“In the medium term, we think lower US inflation and lower Fed rate hike pricing are required for digital asset markets to find widespread support,” crypto funder Grayscale Investments wrote in a past note.
The company noted that investor appetite may increase for riskier crypto assets, noting that Bitcoin dominance may decrease in the $ 1.2 trillion cryptocurrency market.