Cryptocurrency prices and stock indices saw a slight retreat following the release of encouraging Consumer Price Index (CPI) data from the U.S.

Uniswap, ICP, AAVE Rise as Bitcoin Retreats

Bitcoin experienced a decline, falling to $56,600, while the overall cryptocurrency market cap dropped to $2 trillion. Similarly, stock market indices such as the Dow Jones, Nasdaq 100, and S&P 500 futures also dipped by over 0.50%.

Most cryptocurrencies were in the red after the CPI data was released. However, some top gainers included Internet Computer (ICP), AAVE, Uniswap, and THORChain, which saw increases of over 2%.

Consumer Price Index Data

The Bureau of Labor Statistics reported that the headline CPI dropped for the fourth consecutive month, reaching 2.5%, its lowest level since 2021. On a month-on-month basis, the CPI remained unchanged at 0.2%.

Meanwhile, the core CPI, which excludes volatile food and energy prices, rose from 0.2% to 0.3%, higher than the anticipated 0.2%. Annually, it remained at 3.2%.

These figures were generally in line with consensus forecasts, with the notable exception of the hotter-than-expected monthly core inflation (0.3% versus 0.2%).

Given the extreme degree of “data point dependency” in the marketplace, immediate asset price reactions include higher rates and lower stock prices.

This data followed the release of mixed job statistics, which showed the economy adding 112,000 jobs in August, while the unemployment rate stayed above 4.0%.

Federal Reserve Rate Cut Expectations

Bitcoin, altcoins, and stocks had mild reactions to the U.S. CPI data, as it is unlikely to significantly impact the Federal Reserve’s upcoming meeting. The CME Fed Watch tool indicates that 85% of market participants expect a 0.25% rate cut, bringing the official cash rate to between 5.25% and 5.50%.

In theory, risky assets like Bitcoin should benefit when the Fed cuts interest rates, as lower government bond yields may drive investors towards these assets. However, this rotation might take time, as fixed income will continue to offer attractive yields for a while.

Additionally, Bitcoin and altcoins may have retreated due to the rising odds of Kamala Harris winning the general election after a recent debate. Polymarket data shows that she has overtaken Donald Trump, although the race remains tight according to polls.

Uniswap and AAVE Performance

The Uniswap token saw an increase due to rising volumes on its decentralized exchange (DEX) platform. Data indicates that its weekly volume surged by over 33% to exceed $6 billion. AAVE also experienced gains as whale accumulation continued.

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