Bitcoin (BTC) looked to pin $24,000 as support ahead of the Wall Street open on July 29 as new inflation data sparked euro concerns.
Eurozone inflation estimate shows no spike
Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair held onto most of its latest gains after rising to nearly $24,500 overnight.
The day’s macro action brought bad news for the European Economic Area (EEA), as the latest estimates for euro inflation came in at 8.9% in July, still up from 8.6% in June.
“As for the main components of euro zone inflation, energy is expected to have the highest annual rate in July (39.7%, compared to 42.0% in June), followed by food, alcohol and tobacco (9.8 %, compared to 8.9% in June), non-energy industrial goods (4.5%, compared to 4.3% in June) and services (3.7%, compared to 3.4% in June),” reads an attached report prepared by Eurostat.
The data provided a curious contrast in some EU member states, where growth exceeded expectations despite the highest inflation figures in the history of the euro’s existence. This led some commentators to suspect that all was not as it seemed.
800B Euro spending fund papering over sad realities. https://t.co/31m7ZviKtb
— Tamay Ozgokmen (@TOzgokmen) July 29, 2022
A spending fund of 800,000 million euros that covers the sad reality.
However, the European dilemma buoyed the US dollar, which had retreated from its last two-decade highs against a basket of trading partner currencies through July.
The US Dollar Index (DXY) hit 105.54 on the day, its lowest reading since July 5 before bouncing to around 106 at the time of writing.
A key inverse correlation for crypto markets, further advances from DXY could signal fresh pressure on BTC price action.
“DXY just dropped to previous high now supported and seems to be holding. Possible bounce here to 107, 108 before further drop”, predicted popular trading account, Mikybull Crypto, in a new Twitter update, adding that this scenario would imply a pullback to $22,800 per BTC/USD.
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Meanwhile, in a possibly unexpected bullish turn, Arthur Hayes, former CEO of derivatives platform BitMEX, hinted that a weaker dollar was now imminent.
Following the Fed’s latest key rate hike, Hayes said the central bank’s return to accommodative monetary policy and more neutral rates had already begun.
Fed Chairman Jerome Powell wrote on July 28 that he would no longer increase hikes, something he called the “Powell pivot.”
The Powell Pivot is here, my body is ready and so is my portfolio. pic.twitter.com/hlI8lzqLcX
— Arthur Hayes (@CryptoHayes) July 28, 2022
The “Powell Pivot” is here, my body is ready and so is my wallet.
The theory, as Cointelegraph reported, revolves around the Fed having little room to maneuver thanks to rate hikes increasing the likelihood of a deeper downturn in the US economy.
The latest GDP data released this week had already put the US into a technical recession thanks to two consecutive quarters of negative numbers.
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