Last Updated on 13/08/2026
Bitcoin edged lower on Wednesday, slipping 0.2% to $63,487, as easing expectations for a Federal Reserve rate hike failed to offset lingering market concerns. Investor sentiment was weighed down by fading hopes for a U.S.-Iran agreement to reopen the Strait of Hormuz, as well as continued pressure from recent selling activity by Strategy, the largest corporate holder of Bitcoin.
July Inflation Data Meets Expectations
Markets closely monitored the July Consumer Price Index (CPI) report for clues on the Fed’s next policy move. The data followed a weaker-than-expected U.S. jobs report that had already prompted traders to reassess the likelihood of additional rate increases.
According to the Bureau of Labor Statistics, headline CPI rose 0.1% month-over-month in July after falling 0.4% in June, while annual inflation eased to 3.4% from 3.5%. Core CPI, which excludes food and energy prices, increased 0.2% on a monthly basis and slowed to 2.5% year-over-year from 2.6%. All figures matched market forecasts.
Attention now shifts to the Producer Price Index (PPI) report, which could provide further insight into inflation trends. While CPI and PPI remain important indicators, the Federal Reserve primarily focuses on the Personal Consumption Expenditures (PCE) Price Index when assessing inflation pressures.
Fed Rate Expectations Shift
The inflation data reinforced the view that policymakers may have room to keep interest rates unchanged rather than raise them further. Following the CPI release, CME FedWatch data showed the probability of the Federal Open Market Committee (FOMC) leaving rates unchanged in September rising to 62%, up from 54% previously.
JPMorgan economists Michael Feroli and Harry Downie estimated that core PCE likely increased 0.22% in July, which would keep the annual reading unchanged at 3.3%. However, they noted that the estimate could be revised after the release of July’s PPI figures.
The analysts added that the latest inflation report was unlikely to significantly strengthen either the hawkish or dovish camp within the Fed, leaving policymakers dependent on upcoming employment and inflation data. JPMorgan continues to expect a rate increase in December, although the possibility of an earlier move remains elevated.
Geopolitical Tensions Keep Markets on Edge
Beyond monetary policy, investors remained focused on developments in the Middle East. Hopes for a deal to reopen the Strait of Hormuz weakened as both the United States and Iran maintained firm positions regarding control of the strategic shipping route.
Former President Donald Trump stated that the United States had “total control” over the strait, while Iranian officials reiterated demands that Washington end hostilities and release frozen assets before any reopening could occur.
The uncertain outlook contributed to renewed volatility in energy markets. Brent crude briefly approached the $90-per-barrel mark as traders assessed supply risks linked to disruptions in the region. Additional concerns emerged after reported attacks on commercial shipping routes near the Bab el-Mandeb Strait and the Gulf of Oman.
Altcoins Mostly Decline
The broader cryptocurrency market largely mirrored Bitcoin’s cautious performance. Ethereum gained 0.2% to trade near $1,881, while XRP fell 1.1%.
Elsewhere, Solana and BNB each slipped around 0.3%, while Cardano dropped 2.1%. Among meme-based cryptocurrencies, Dogecoin lost 1.8% and the TRUMP token declined 3.2%.
Overall, softer inflation data and reduced expectations for near-term Fed tightening provided limited support to digital assets, with geopolitical uncertainty and broader market caution continuing to cap upside momentum.
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