Traders in Bitcoin (BTC) and other cryptocurrencies have turned defensive ahead of the U.S. inflation report for August that is scheduled to be released on Sept. 11.
Crypto traders on Wall Street have reduced their bullish exposure with the inflation data expected to show a rise in consumer prices.
Market data shows that the number of call options that bet on an increase in Bitcoin’s price have weakened in recent days.
Bitcoin’s price has pulled back to $77,650 U.S. on Sept. 10 from its recent high above $82,000 U.S. as markets brace for what’s anticipated to be a hot inflation reading.
Crypto and stocks are also under pressure from rising crude oil prices and elevated bond yields.
Rising inflation data will ratchet up pressure on the U.S. Federal Reserve to raise interest rates and bring the Consumer Price Index (CPI) back down to its 2% annualized target.
Higher interest rates are negative for risk assets such as cryptocurrencies and stocks and often drive investors into safe haven assets such as gold.
Markets are currently pricing in a 60% chance that the U.S. central bank raises interest rates by 25 basis points at its next meeting on Sept. 16.
Inflation in the U.S. was at an annualized rate of 3.4% in July of this year. Inflation has been above the Fed’s 2% target for more than five years.
