Bitcoin has settled after a wild inflation and interest rate roller coaster.

The past 24 hours have been a volatile roller coaster for Bitcoin.

BTC prices rose after a better-than-expected Consumer Price Index (CPI) print before markets opened in the US, but the rally was short-lived, as Bitcoin prices fell after Fed Chairman Jerome Powell's comments.

According to data from CoinGecko, at the time of writing, the price of Bitcoin is sitting at $67,350 – down 0.7% from yesterday.

On Wednesday, the price of Bitcoin rose from $ 67,385 to $ 69,945, an increase of 3.8%, after the CPI data came in at 3.3% – 0.1% less than analysts predicted. But then BTC fell to $66,997, a 4.5% drop, Powell said during the press conference that the Federal Reserve may cut rates only once this year.

Powell said the Federal Open Market Committee (FOMC) would not cut interest rates if the central bank did not have confidence in CPI inflation to fall below its 2% target.

Earlier this year, a dot plot—a collection of forecasts made by Fed presidents and governors—indicated that the Federal Reserve expected three rate cuts by the end of the year.

Market participants are expecting a rate cut of 25 basis points at the September FOMC meeting, with nearly 43% of participants expecting another 25 bps cut after the December FOMC meeting, according to the CME FedWatch Tool.

Interest rates play a key role in the price action of risky assets such as cryptocurrencies and the stock market. Low interest rates increase liquidity in the system, as the cost of borrowing capital is low and investors seek higher returns on their capital due to fixed income assets that offer lower returns.

Interestingly, the trio of senators led by Sen. Elizabeth Warren (D-MA) wrote a letter to Jerome Powell on June 10 urging the Fed to cut interest rates. The lawmakers said high interest rates are now starting to hurt the US economy.

“You've kept interest rates high for too long. It's time to cut rates.” He said in the letter.

In a note shared with Decrypt, Lina Eldib, research associate at 21Shares, explained that the Federal Reserve may soon cut interest rates for several reasons.

According to the memo, the Federal Reserve may revise its 2% target rate as higher interest rates are doing more harm than good to the US economy. Both the Bank of Canada and the European Central Bank cut interest rates, strengthening the Federal Reserve's ability to revise its target.

Also, high interest rates are straining the US banking system.

“63 banks were declared to have $517 billion in unexpected losses, up $39 billion from the first quarter. This FDIC information may influence the Federal Reserve to cut rates soon,” ElDeeb said.

Edited by Stacy Elliott.