Bitcoin
traders are seeking downside protection ahead of the U.S. inflation data, which is anticipated to show that trade tariffs are starting to impact consumer prices.
The report, due at 12:30 UTC, is expected to indicate that the headline consumer price index (CPI) rose 2.8% year-on-year in July, up from a 2.7% increase in June, according to data.
On a monthly basis, prices are forecasted to rise 0.2%, a slight decrease from July’s 0.3%. The core CPI, which excludes the fluctuating food and energy sectors, is likely to have increased by 0.3% in July after a 0.2% rise in June.
Analysts indicate that an unexpectedly high CPI could hinder rate cuts by the Fed, potentially impacting risk assets, including BTC.
‘The market’s immediate focus is on Tuesday’s U.S. CPI print, with expectations for a modest increase to 2.8% YoY. A lower reading could likely solidify a September rate cut by the Federal Reserve, which would be favorable for risk assets. Conversely, a higher print could slow the rally, triggering profit-taking across risk assets,’ an analyst stated.
Some traders are already positioning for a hotter print and corresponding losses in BTC. Precautionary trends are evident from increased demand for short-dated put options, which safeguard against losses in the underlying asset.
“In anticipation, some traders are hedging event risk, with increased demand for front-end $115,000–$118,000 BTC puts to guard against a downside surprise,” the analysis team said. “This defensive positioning is complemented by short-call covering from upside buyers.”
The covering of short call positions suggests traders remain cautious about upside risk. BTC was trading at $118,525 at press time.
Read more: RialCenter
Leave a Reply