Bitcoin traded mostly sideways on Wednesday as investors weighed cooler-than-expected U.S. inflation data against fading hopes for a U.S.-Iran agreement to reopen the Strait of Hormuz.
The world’s largest cryptocurrency slipped around 0.4% to $63,995 by 09:51 ET, remaining close to the $64,000 level.
Bitcoin Remains Stuck in a Tight Trading Range
Bitcoin continued to trade within its recent $60,000 to $65,000 range, with few strong catalysts encouraging investors to push prices decisively higher.
Sentiment was also affected by recent disclosures showing additional Bitcoin sales by Strategy, one of the largest corporate holders of the cryptocurrency.
As a result, traders remained cautious while waiting for stronger macroeconomic or crypto-specific signals.
U.S. Inflation Cools in July
U.S. consumer inflation eased slightly in July, keeping attention firmly on the Federal Reserve’s September interest-rate decision.
The Consumer Price Index rose 3.4% year over year, slowing from 3.5% in June and matching economists’ expectations.
On a monthly basis, consumer prices increased 0.1%, following a 0.4% decline during the previous month.
Meanwhile, energy prices dropped 1.5% from June, although they remained 14.7% higher compared with the same period a year earlier.
Gasoline prices also declined 2.9% during the month, marking their second consecutive monthly fall.
Core Inflation Matches Expectations
Core CPI, which excludes volatile food and energy prices, increased 0.2% month over month.
On an annual basis, core inflation stood at 2.5%, also matching market expectations.
The latest figures eased some concerns that rising energy costs could trigger another significant inflation surge.
However, uncertainty remains because oil prices have increased sharply amid ongoing tensions involving Iran and the Strait of Hormuz.
Fed September Decision Remains Uncertain
The Federal Reserve now faces a complicated policy environment.
Higher energy prices could increase inflationary pressure and potentially strengthen the case for tighter monetary policy. At the same time, weaker-than-expected July employment figures have reduced expectations for another rate increase.
Markets therefore remained divided following the inflation report.
According to CME FedWatch data cited in the report, traders assigned roughly a 56% probability that the Fed would leave interest rates unchanged in September, compared with a 44% probability of a quarter-point increase.
Interest rates remain particularly important for cryptocurrency markets because lower borrowing costs and greater financial-system liquidity can generally support demand for higher-risk assets such as Bitcoin.
Strait of Hormuz Uncertainty Hurts Risk Appetite
Geopolitical developments also weighed on cryptocurrency sentiment.
Optimism faded over the possibility that the United States and Iran were close to reaching an agreement that would restore normal shipping activity through the Strait of Hormuz.
Shipping through the crucial energy route remained limited despite U.S. statements that the waterway was open and negotiations with Iran were continuing.
Iran, however, denied that talks with Washington had taken place and reportedly demanded that compensation-related conditions be addressed before any Hormuz agreement could move forward.
Oil Prices Rise on Middle East Tensions
Oil prices climbed toward two-week highs on Wednesday as uncertainty surrounding the Strait of Hormuz continued.
Further fighting involving Houthi and Saudi forces in the Red Sea added to concerns about global energy supplies.
Higher crude oil prices can increase inflationary pressure because energy costs affect transportation, manufacturing and consumer expenses.
This creates another potential challenge for central banks that are trying to keep inflation under control without unnecessarily weakening economic growth.
For Bitcoin and other speculative assets, tighter monetary conditions could become a significant headwind.
Altcoins Trade Sideways With Bitcoin
The broader cryptocurrency market also showed limited movement as investors remained cautious about geopolitical tensions and the global economic outlook.
Ether gained around 0.7% to approximately $1,903, while XRP also rose about 0.7% to $1.0159.
Solana and BNB recorded only modest moves, while Cardano declined around 1.7%.
Among major meme coins, Dogecoin traded broadly flat, while TRUMP fell around 2.1%.
Overall, the cryptocurrency market remained caught between slightly more encouraging U.S. inflation data and growing geopolitical uncertainty surrounding Iran, oil markets and the Strait of Hormuz.
