Bitfinex analysts are positive about Bitcoin’s future because new data from the Consumer Price Index (CPI) shows that a Federal Reserve rate cut in September is likely.
The yearly inflation rate dropped a lot in July, to 2.9%, according to the most recent CPI numbers, which came out on August 14. This is the first reading below 3% since early 2021.Analysts at Bitfinex think that this drop in inflation will be good for markets, especially those that deal in risky assets like Bitcoin.
Bitcoin Boosted By Rate Cuts
They think that if interest rates go down, there will be more money available, which will support a bullish trend in the cryptocurrency business. As buyers get ready for the expected rate cut, the better CPI data is also likely to make them invest in Bitcoin and Ethereum ETFs.
Bitcoin is getting close to important levels of support, which are between $64,000 and $65,000. A rate cut could cause prices to rise sharply, but short-term selling pressure from significant investors, or “whales,” could stop gains before a possible breakout.
Aurelie Barthere, Principal Research Analyst at Nansen, agrees with this point of view and points out that “super core” services inflation has slowed down a lot, which is an important measure for the Federal Reserve. This slowdown gives the central bank more room to lower interest rates without making people worry about inflation.
Barthere says that the interest rate could be lowered by 75 basis points by December 2024. However, she adds that the economy must continue to grow, especially in terms of consumer spending, in order for the market to recover.
