Bitcoin largely flat despite cooling U.S. inflation, rebound capped in $63,000 range

U.S. inflation slowed to 3.4 percent in July, but bitcoin rose only slightly, remaining in the $63,000 range.

On Aug. 12 local time, blockchain outlet Decrypt said markets did not take the consumer price index (CPI) release as a new variable, and the crypto market also failed to show a clear direction.

The Bureau of Labor Statistics (BLS) said July CPI rose 0.1 percent from the previous month. It fell 0.4 percent in June, and the July reading matched market expectations. The year-on-year increase was 3.4 percent, slightly lower than June's 3.5 percent.

In the breakdown, shelter costs accounted for most of the overall rise. The shelter index rose 0.1 percent in July, making up about two-thirds of the monthly increase. Energy prices fell 1.5 percent due to a drop in gasoline prices. Core inflation excluding food and energy rose 0.2 percent on the month and 2.5 percent from a year earlier.

Cooling inflation typically lifts expectations of U.S. Federal Reserve rate cuts and is a positive for risk assets such as bitcoin. But the CPI stayed within the expected range and inflation remains above the Fed's 2 percent target, so it did not act as a factor that could change the policy path.

The fact that related expectations were already largely priced into the market also limited bitcoin's gains. Spot bitcoin exchange-traded funds (ETFs) saw inflows of about $854 million for five consecutive trading days last week. With concerns about rate hikes easing, inflows were the strongest since May, and the analysis is that easing expectations were priced in before the CPI release.