Bitcoin (BTC) reclaimed the $24,000 level but failed to hit new multi-month highs on Aug. 10 as US inflation appeared to be slowing.
The IPC reduces the slack that risky assets need so much
Data from Cointelegraph Markets Pro and TradingView confirmed hourly gains of around $1,000 after US Consumer Price Index (CPI) data for July showed a slowdown from the previous month.
Although it managed to reach $24,179 on Bitstamp, the BTC/USD pair did not attract enough momentum to challenge the previous day’s levels.
Nevertheless, relief among traders was palpable as the decline in inflation should signal to the Federal Reserve that a less aggressive interest rate hike is needed going forward. This, in turn, should reduce the pressure on risk assets, including cryptocurrencies.
Annual CPI inflation came in at 8.5%, 0.2% below expectations, while the month-on-month figure was unchanged from June.
Over to you Sir Powell, you know what to do. pic.twitter.com/qwMbdtriNm
— Arthur Hayes (@CryptoHayes) August 10, 2022
“Markets now have a pretty clear run to the regional Fed surveys in a few weeks or so. I expect them to be significantly weaker,” reacted Raoul Pal, founder of Global Macro Investor.
“Peak inflation gives way to fear of peak growth. I think markets will react positively to weak growth, not negatively, broadly speaking.”
Blockware Principal Analyst William Clemente was more cautious and described the rally in risky assets as “short-term” after the release.
Faith in the Fed cooling off its aggressive cycle of rate hikes faded almost immediately, with bets on a 75 basis point hike in September sharply lowered in favor of 50 basis points.
“The CPI for July is bullish, especially for technology stocks”, added market commentator Holger Zschaepitz.
The dollar sinks to the rhythm of Ethereum, which breaks its best mark for several months
Celebrating the IPC event more than Bitcoin, meanwhile, was Ether (ETH), which capitalized on the mood to post its highest levels since June 7.
At $1,847, the ETH/USD pair gained 11.5% on the day, fueling hopes that the crypto rally could be more than just a drill.
“Some of you forget that the market can pump and it’s not really a trap. Especially if it’s driven by fundamentals,” tweeted trader and commentator Josh Rager.
Nevertheless, A clear loser on the day was the US dollar, which extended a downward trend since mid-July following the CPI release.
The US Dollar Index (DXY) lost 1.3%, now heading towards its 100-day moving average, according to popular trader Pierre.
$DXY – D1
Hard to make it clearer/cleaner, I guess simple TA works too on US ponzi.
Until D1 trend reclaimed, I guess D1 100 MA @ 103-104 doable but what do I know. https://t.co/FeGFYBFcdi pic.twitter.com/lhQEcbIxTK
— Pierre (@pierre_crypt0) August 10, 2022
$DXY – D1
Difficult to make it clearer/cleaner, I guess the simple TA works on the US ponzi as well.
Until the D1 trend picks up, I guess the D1 100 MA @ 103-104 is doable, but what do I know.
Sven Henrich, founder of the analysis company NorthmanTrader, described the DXY as “crushed”.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. All investments and operations involve risk, so you must carry out your own research when making a decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.