Bitcoin (BTC) could resume its rally toward $66,000 in the near term and break past this key resistance as odds of a rate hike in September by the Federal Reserve dropped sharply. In July, the 12-month inflation rate stood at 3.4%, meaning a 10 basis points decline compared to the previous month. This lower print was in line with analysts' expectations for the period, and it seems to have eased the market's concerns about a hawkish Fed.
Odds of a rate hike next month retreated from a previous high of around 70% to 32% at the time of writing. This phenomenon could improve market sentiment in the near term and catalyze a rally for cryptocurrencies. That said, this does not necessarily mean that the Fed won't raise rates.
During the last FOMC meeting, three Fed governors disagreed with the decision to keep rates unchanged. The primary reason for this is that inflation is quite distant from the Fed's target of 2%. As internal pressures persist, there is still a risk that the central bank would lean toward adopting a more aggressive approach to keep prices from spiraling out of control.
If the Fed does delay a rate hike or comments point to a dovish stance, that could have a significant impact on the price action as it could prompt a risk-on move across the crypto space. News of the Coldcard hack may have temporarily put a lid on the rally that started on August 1. Thus far, investigators have uncovered total losses exceeding $100 million from the incident.
Cold wallets have been deemed the safest method to store digital assets. However, this breach highlighted that a weakness in the wallet's coding could still result in losses. Meanwhile, Coinkite has not offered any kind of relief to the victims, even though it was their faulty code that led to the loss of their assets.
As a result, the market has started the week with a negative tone, as investors have taken out $198 million from exchange-traded funds (ETFs). This could be a reaction to Bitcoin's latest retreat. However, we continue to see ongoing whale accumulation.
Extract — continue reading at the source.
