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Bitcoin prices fell slightly on Thursday as markets remained cautious ahead of a key U.S. inflation reading that could influence the outlook for interest rate cuts. The cryptocurrency is set to end August with significant losses, driven by a broader risk-off sentiment that has affected financial markets.
Bitcoin Struggles in August Amid Multiple Headwinds
As of 01:55 ET (05:55 GMT), Bitcoin fell 1% to $58,852.9, marking a near 9% decline for the month of August. The cryptocurrency has faced persistent downward pressure throughout the month, primarily due to concerns over token distributions and potential mass sale events, notably from the defunct exchange Mt. Gox.
Slowing capital inflows into the cryptocurrency market have also contributed to Bitcoin’s decline, particularly as the initial excitement over the launch of spot Bitcoin exchange-traded funds has faded. According to blockchain analytics firm Glassnode, this waning interest has led to a reduction in speculative activity, leaving few immediate catalysts for price movement.
Retail interest in Bitcoin has also diminished, further exacerbating its decline. While concerns over a potential U.S. recession triggered broad losses across global financial markets at the start of August, Bitcoin has struggled to recover, even as other markets, such as stocks, have bounced back.
Throughout August, Bitcoin has traded within a range of $50,000 to $60,000, struggling to maintain levels above $60,000 for extended periods.
Broader Cryptocurrency Market Also Sees Losses
The broader cryptocurrency market mirrored Bitcoin’s decline, with major altcoins also nursing losses for the month. Ether, the world’s second-largest cryptocurrency, fell 1% to $2,515.61 and was down 22.2% in August, marking its worst monthly performance since January 2022.
Other altcoins, including XRP, SOL, and ADA, fell between 0.4% and 5%, while MATIC shed 3.3%.
Markets Await U.S. PCE Data
Markets are on edge ahead of the release of the U.S. Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge. The data is expected to influence the central bank’s stance on interest rates. Lower rates generally benefit cryptocurrencies by freeing up liquidity for speculative trading.
Traders are currently pricing in a higher probability of a 25 basis point rate cut in September, according to CME Fedwatch.
Dogecoin Dips Despite Legal Win for Elon Musk
Dogecoin, one of the leading meme tokens, fell 1% on Thursday, showing little reaction to the dismissal of a lawsuit alleging that Elon Musk and Tesla manipulated its price. The lawsuit accused Musk of using social media posts to hype Dogecoin and teasing the possibility of accepting it as payment for Tesla vehicles. While Tesla currently accepts DOGE for merchandise, the legal victory did little to support the token’s price.
