Despite CPI decline, Bitcoin plunges... Shock to market due to Fed's rate freeze stance

Although the United States Consumer Price Index (CPI) fell short of market expectations, as the Federal Reserve's interest rate freeze policy continued, the price of Bitcoin (BTC) plummeted and is threatening key support levels.

According to Cointelegraph on the 12th (local time), Bitcoin fell 1.7% over the past 24 hours, pushed back from the $108,000 resistance line, and is now in danger of the key $106,000 support line collapsing. According to Bitstamp and Cointelegraph Markets Pro data, Bitcoin has continued its bearish trend for three consecutive days with mounting downward pressure.

The CPI for May announced on the 11th was 2.4% year-over-year, slightly below the expected 2.5%, and the core CPI also fell short of expectations at 2.8%. However, as the Federal Reserve still showed no sign of switching to an accommodative monetary policy, the market expressed disappointment.

Capital market commentator ‘The Kobeissi Letter’ pointed out through X (formerly Twitter) that “overall inflation has come down, but the prices of essentials like food are still rising rapidly,” and “American consumers are growing weary of inflation fatigue.”

This decline appears to be due to diminished expectations regarding Federal Reserve policy direction rather than simple economic indicators, and the cryptocurrency market is likely to remain sensitive to macro policy variables for some time.