Bitcoin experienced a significant drop to $56,000, reflecting a 4% decrease in just 24 hours, following the release of the latest U.S. Consumer Price Index (CPI) report. The July CPI showed a 2.9% year-over-year increase, which matched expectations but marked the first time since 2021 that the CPI fell below 3%. Despite this, the crypto market reacted negatively, leading to this sharp decline in Bitcoin's value.

Bitcoin Drops to $56,000 After U.S. Inflation Report, with Record Outflows from BTC ETFs

Additionally, Bitcoin-focused exchange-traded funds (ETFs) in the U.S. saw a net outflow of $81 million, reversing a two-day trend of positive inflows. Grayscale's GBTC had the most significant outflows, losing $56 million, followed by Fidelity's FBTC with $18 million in outflows. Only two ETFs, Franklin Templeton's EZBC and BlackRock's IBIT, managed to see inflows, totaling $6 million.

The broader cryptocurrency market mirrored Bitcoin's downturn, with major tokens like Ethereum, Solana, and XRP suffering substantial losses. Some analysts suggest that Bitcoin might continue to drop, potentially reaching $55,000 before any recovery occurs. However, despite this bearish outlook, certain institutional investors are using the dip as an opportunity to increase their positions in BTC ETFs, signaling ongoing confidence in Bitcoin's long-term potential ​(markets.businessinsider.com).