On August 12, Bitcoin fell to $57,653, increasing its 24-hour losses to 2% as investors positioned themselves ahead of a busy macroeconomic data week. The momentum that pushed Bitcoin above $60,000 at the end of last week is being questioned as bears and bulls struggle to control the price. Data from TradingView shows Bitcoin dropped from a peak of $60,000 on August 12 to a daily low of $55,681, a decline of up to 4%.
Critical Week for Markets
Following the market volatility in the week ending August 11, the upcoming release of the US Consumer Price Index (CPI) and Producer Price Index (PPI) data is expected to reveal the Federal Reserve’s flexibility to meet rising expectations around its first rate cut in September.
CPI is expected to continue falling, which should prompt the Fed to consider a significant rate cut. The UK is also expected to release its July CPI data on August 14, while Australia’s consumer confidence, which tracks sentiment around household finances, and Japan’s PPI, a measure of price developments in the corporate sector, are scheduled for release on August 13.
Details on the Matter
According to the Kobeissi Letter team, one of the main driving factors behind the recent Bitcoin selling pressure is the weakening labor market. In a post on X on August 12, Kobeissi Letter revealed that the consumer confidence index fell to 34.1 in July, the lowest level since March 2021.
They suggested that Americans are the most pessimistic about finding a new job in three years. Kobeissi noted that the ratio of job openings to unemployed individuals fell from 2.0 in 2022 to 1.2 in 2024, stating:
“The labor market is no longer tight.”
Macro market events tend to move crypto prices as they reveal the overall state of the economy. Mixed economic signals leave market participants uncertain about the market’s direction, leading to high volatility in Bitcoin’s price movement, as seen on August 12. According to the latest data from CME Group’s FedWatch Tool, as of August 12, market participants are pricing in almost equal odds of a 0.25% and 0.5% rate cut by the Fed in September.
