bitcoin BTC
-3.71%
Concerns are growing in the stock market ahead of Tuesday’s U.S. Consumer Price Index (CPI) report and Wednesday’s Federal Reserve interest rate announcement.
Investors do not expect the U.S. Federal Reserve to have much wiggle room as May payrolls are much higher, lowering expectations of the central bank’s first interest rate cut in September. Interest rate traders are betting the Federal Reserve may keep rates on hold until November, according to CME’s FedWatch tool. This tool indicates that there is a 47% chance that the Federal Reserve will keep interest rates at their current levels at the September Federal Open Market Committee (FOMC) meeting.
Bitcoin follows stocks and falls.
US stock futures fell ahead of the latest CPI inflation report and the June FOMC meeting. In pre-market trading, Dow Jones Industrial Average futures were down 0.38% and S&P 500 futures were down 0.23%.
Meanwhile, major European and UK stock indices were red. London’s FTSE 100 index fell 60.90 points to 8,167.58 in intraday trading.
bitcoin It fell due to the stagnant stock market. The world’s largest digital asset by market capitalization has fallen about 3.7% over the past day, changing hands at $66,797 at 7:12 am. According to E.T. Block’s pricing page.
Bitcoin related to risky assets
Deribit CEO Luuk Strijers told The Block that Bitcoin is currently showing a higher correlation to risk assets than usual. “Right now, even for gold, the correlation is above average,” Strijers said. His observations are consistent with the 30-day BTC Pearson correlation chart available on The Block Data Dashboad.
Strijers said that as a result of this correlation, the Bitcoin market could see heightened caution and risk-off sentiment ahead of US inflation numbers and the FOMC meeting on Wednesday.
“Traders are likely to hedge more conservatively, potentially reducing exposure or using options strategies until the economic outlook becomes clearer. Implied volatility has fallen across the curve for Bitcoin and Ethereum, despite this near-term uncertainty. Nonetheless, basis yields and currency distortions remain high for all listed expirations,” Strijers added.
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