Recaps · US CPI · 14 Aug 2024, 13:30 UK
Good news, bad candle
This was the report the market had been hoping for: annual inflation below 3% for the first time in nearly three and a half years. Stocks took it calmly. Bitcoin rose for one candle and then fell for almost two hours.
- Release
- Wednesday 14 August 2024, 13:30 UK
- CPI
- +0.2% m/m, 2.9% y/y, lowest since 2021 (Reuters)
- Core CPI
- +0.2% m/m, 3.2% y/y
- Expectations
- In line on the annual rate (CoinDesk)
- Bitcoin at release
- $61,742
The numbers
Prices rose 0.2% in July and 2.9% over the year. Reuters called it the third straight month of tame readings, opening the door to a Fed cut in September. The annual rate matched forecasts, so the report confirmed a story rather than changing it.
A fakeout, then a slide
- 1 13:30 UK: high near $61,810
- 2 15:10 UK: low, about 4.6% down
Cointelegraph described a "fakeout": Bitcoin spiked to $61,809 on Bitstamp, then fell more than 3% in just over an hour. Our data matches that. Bitcoin was -1.48% at 14:30 UK, #22 of 117 CPI reports at 3.2 times a normal hour, and about 4.6% down at 15:10 UK. Ether was -4.6% at four hours. The S&P 500 ETF was -0.18% and the Nasdaq-100 ETF -0.69% after their first hour.
| Market | 15m | 1h | 2h | 4h | 24h | × normal hour |
|---|---|---|---|---|---|---|
| Bitcoin | −0.74% | −1.48% | −3.61% | −4.36% | −4.91% | 3.2× |
| Ethereum | −0.93% | −2.01% | −4.13% | −4.58% | −4.96% | 3.4× |
| Solana | +1.15% | +0.45% | −1.70% | −2.10% | −3.98% | 0.8× |
| S&P 500 ETF (SPY) | −0.23% | −0.18% | +0.07% | +0.05% | – | – |
| Nasdaq-100 ETF (QQQ) | −0.43% | −0.69% | −0.12% | −0.28% | – | – |
Change from the 13:30 UK release. The ETFs are measured from the 14:30 UK open.
What else was going on
Later that day, the US government moved 10,000 Bitcoin seized from Silk Road, about $593 million, to Coinbase Prime (CoinDesk, Arkham). Traders read exchange deposits as a sign of selling. But CoinDesk noted that the price drop happened before the transfer, and Cointelegraph timed the move at 16:38 UK, well after our 15:10 low. So it cannot explain the first leg down. Spot Bitcoin ETFs had $81 million of net outflows that day (CoinDesk).
What traders could learn
An in-line report that confirms an expected cut gives buyers little new to act on. A month earlier, after the softer-than-expected June report, released on 11 July, Bitcoin also started flat and was 1.8% down at four hours. Two reports in a row, Bitcoin fell after "good" inflation news while stocks were calm. In both cases the move looked more like crypto's own selling than a verdict on inflation. Bitcoin was -4.9% a day later.
Sources: release time and figures from the U.S. Bureau of Labor Statistics (public domain), first-print values via ALFRED, Federal Reserve Bank of St. Louis. Crypto: Bitstamp 5-minute candles; SPY/QQQ: IEX. No consensus forecasts are shown because they are proprietary; comparisons are with the previous release. “× normal hour” compares the first-hour move with the median move in matched quiet hours. How we measure it.