Bitcoin Drops as Hot US CPI Data Fuels Rate Hike Fears

Key Facts

1US headline CPI inflation surged to 3.7% year-over-year, up from the previous 3.4%.

2Bitcoin price dropped more than 1% shortly after the CPI release as traders reassessed interest rate outlooks.

3A 9.1% jump in gasoline prices was a major contributor to the monthly inflation increase.

Bitcoin price dropped more than 1% shortly after the release of US inflation data that showed higher-than-expected price pressures. Invezz reported that the annual US headline CPI inflation surged to 3.7%, up from the previous reading of 3.4%. The decline in the cryptocurrency came as traders reassessed the interest rate outlook in light of persistent inflation.

A 9.1% jump in gasoline prices was a major contributor to the monthly increase in headline inflation, according to Invezz. Hotter-than-expected CPI data typically reduces the likelihood of Federal Reserve interest rate cuts, increasing selling pressure on risk assets like cryptocurrencies which faced momentum loss after breaking key support levels.