Bitcoin holds near $63K as traders eye Fed pause odds after CPI

Bitcoin traded near $63,000 on Wednesday, failing to extend gains despite U.S. consumer inflation data that matched expectations, which boosted market expectations for a pause in Federal Reserve rate hikes next month.

The Labor Department reported that the Consumer Price Index rose 3.2% year-over-year in July, in line with forecasts, while core CPI, excluding food and energy, increased 4.7%, also meeting projections. The figures tempered concerns over persistent inflationary pressures and increased the probability of the Fed holding rates steady at its September meeting to around 60%, according to CME Group’s FedWatch tool.

Despite the positive CPI surprise, Bitcoin’s price action remained subdued, with the cryptocurrency struggling to sustain a break above $63,000. Analysts noted that the $63,000 level had acted as a key support level in recent sessions, and its failure to hold could signal further downside pressure. Technical indicators suggested limited momentum, with the Relative Strength Index hovering near neutral territory.

Traders remained cautious, citing broader macroeconomic uncertainties, including geopolitical risks and potential shifts in Fed policy. The interplay between inflation data and central bank decisions continued to drive short-term volatility in digital assets, with Bitcoin’s near-term trajectory closely tied to expectations for U.S. monetary policy.

Market participants will closely monitor upcoming economic releases, including retail sales and producer prices, for further signals on the Fed’s next move. The central bank’s September policy decision remains a critical focal point for risk assets, including cryptocurrencies.