Bitcoin
Traders are seeking downside protection ahead of US inflation data. This is expected to show that President Donald Trump’s trade tariffs are beginning to affect consumer prices.
Reports scheduled for 12:30 UTC are expected to show the consumer price index in the headline (CPI) According to Bloomberg data, this was an increase of 2.8% in July from a 2.7% increase in June.
Prices are forecast to rise by 0.2% each month, down slightly from 0.3% in July. Core CPI, which excludes volatile foods and energy components, could have risen 0.3% in July after an increase of 0.2% in June.
Analysts say that a higher-than-expected CPI could potentially examine risk assets, including BTC, weaken Fed rate reductions.
“The market’s immediate focus is on US CPI prints on Tuesday, with the market expecting a 2.8% year-on-year rise. Softer readings could solidify interest rate cuts in September through the Federal Reserve, which is positive for risky assets. Conversely, hotter prints could halt assembly and cause tactical benefits across risky assets,” Timothy Misir, BRN research director, told Coindesk in an email.
Some traders are already positioned for the hotter printing and potential losses of BTC. According to Singapore-based QCP capital, the preventive trend is evident from the increased demand for short-term put options. Put options protect buyers from price losses on underlying assets.
“Forecast, some traders are hedging the risk of events. The front-end $115,000-$118,000 BTC is seeing an increase in demand to protect against downside surprises,” the QCP Capital’s Markets team said Monday. “This defensive positioning is alongside a short call cover from topside buyers.”
The cover of the short call position indicates that traders are also wary of topside risks. BTC changed hands at $118,525 at press.
Read more: Bitcoin Trader Eye $135K, Ether $4.8K CPI Data Loom
