Bitcoin dipped toward $76,000 as underlying price pressures in the US appeared slightly higher than expected in the last US inflation report.
No wider crypto sell-off followed, and Bitcoin jumped back above $77,000, while Ethereum and some larger altcoins remained higher during the session.
US inflation remains above the Fed’s target
The Consumer Price Index increased 0.4% in August, according to the US Bureau of Labor Statistics, higher than July’s 0.1% increase and in line with economists’ forecasts.
Inflation remained at 3.4% year-on-year.
The core inflation measure, which excludes volatile food and energy costs and is regarded as a better gauge of underlying price pressures, rose 0.3% during the month, but most economists had anticipated a slimmer 0.2% increase.
Core inflation, however, had fallen from 2.5% to 2.4%.
Gasoline prices represented over one-third of last month’s increase, soaring 3.9% and pushing the broader energy category up 2.1%.
Housing costs rose 0.3%, while food prices increased by 0.1%.
Bitcoin sees sharp but temporary reaction
Bitcoin initially dropped to approximately $76,050 after the report was released, but then recovered and traded above $77,100 at the time of writing.
The token’s price ranged between $76,400 and $79,550 during the session, and the wide range of moves shows the split among traders who are unsure what the latest inflation headlines mean for US interest rates.
What has helped further is a stronger monthly core reading that could potentially leave the Federal Reserve more adamant in its September 15-16 meeting. Riskier assets appear unattractive to many investors during high interest rates, as they find new avenues for yields.
Ethereum leads the wider crypto market
Ethereum was ahead of Bitcoin during today’s session, trading in a range near $2,543, up nearly 3.2% after hitting highs of $2,648.
Solana was up about 1.5% at around $101, and BNB gained 1.4% at roughly $723. Dogecoin saw a relatively small gain of 0.5%, and XRP was near unchanged at $1.35.
Gains that started before the CPI report cannot be attributed to the inflation result, but their resistance to fall showed that the fall that Bitcoin initially saw had not spread over the market.
Final Summary
- Inflation in the US stayed at 3.4%; US monthly Core CPI was well above expectations.
- Bitcoin recovered above $77,000, having briefly fallen toward $76,000 for a few minutes following the release of the report.
