Gold and Stocks Surge on Stagflation Warning... Bitcoin (BTC) 'Stagnates' Alone

▲ Bitcoin (BTC)

Bitcoin (BTC) lagged alone behind the rising trend of the U.S. stock market and gold. U.S. service sector indicators showed both rising inflation and slowing employment, increasing warnings of stagflation.

Cointelegraph reported on August 6 (local time) that Bitcoin has not been able to break out of the narrow price range that has continued since early June. The U.S. Institute for Supply Management's (ISM) Services Purchasing Managers' Index (PMI) for July rose 0.1 points from the previous month to 54.1. In contrast, the employment index fell 3.6 points to 47.4, the lowest level since March.

The index showing prices paid by businesses surged 2.6 points to 70.3. This figure is close to the highest level since October 2022. The index has risen 16.9 points since March 2024. Market analytics firm The Kobeissi Letter analyzed that “prices are rising and the labor market is weakening, putting pressure on the economy from both sides,” increasing the risk of stagflation.

News that Iran and Oman discussed reopening the Strait of Hormuz oil shipping route also failed to provide a clear direction for Bitcoin. Iranian Deputy Foreign Minister Kazem Gharibabadi stated that “the agreement does not mean the reopening of the Strait of Hormuz.” West Texas Intermediate (WTI) crude oil showed little movement around $76 per barrel after recording a three-week low of $74.3 per barrel the previous day.

On-chain analytics firm Glassnode assessed Bitcoin's stagnation as “a market closer to boredom than capitulation selling.” Although gold hit a six-week high and the S&P 500 reached an all-time high, Bitcoin failed to join the upward trend. Glassnode stated, “It is a compressed market isolated from global risk asset preferences, and bottoming conditions are forming but not yet complete.”

Bitfinex Research also diagnosed that Bitcoin's sluggishness indicates internal market pressure. However, they explained that without strong price movements accompanied by trading volume, it is difficult to conclude that a full-scale collapse is underway. Amid intertwined inflationary pressures and slowing employment, Bitcoin has not secured the momentum to confirm either an upward reversal or further decline.

[Article Key Summary]

-The U.S. Services Purchasing Managers' Index for July rose to 54.1, but the employment index fell to 47.4.

-The Prices Paid Index for businesses surged to 70.3, increasing the risk of stagflation.

-Bitcoin was sidelined from the rise in the stock market and gold, but no full-scale price collapse has been confirmed either.

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