Markets in general, as well as crypto markets, were buoyed by the latest US inflation data, as market participants had priced in a deeper 8.7% drop, July’s 8.5% drop was a sign of relief for risk markets.
Before deciding whether to trigger a 50 or 75 point rate hike at the September meeting, Fed members will meet in Jackson Hole in late August to digest inflation and employment reports..
Analyst Mike Ermolaev weighed in on this: “There is potential for risky assets to rally further should the US central bank adopt a dovish tone amid calming inflationary pressures.“.
“Historically, Bitcoin has followed the legacy markets, as shown below with the S&P 500 in orange and the NASDAQ in blue.. However, since hitting the latest low, the downside in legacy markets has recovered, while Bitcoin has not seen a similar rebound, possibly as a result of the liquidity crunch in the crypto market.“added the analyst.
Source: TradingView
“The CPI data and subsequent monetary policy decisions will continue to play a significant role in determining what happens next. It is clear that the coming months will be marked by the geopolitical situation of the Ukraine-Russia conflict, the European winter energy crisis, China’s policy towards Taiwan, the lockdowns due to Covid, etc..” Ermolayev continued.
Long-term holders are optimistic
Still, in recent years, BTC has delivered at least double-digit annual percentage gains for long-term holders, and it’s too early to say how this year will end as things could change in an instant.
Source: laevitas.ch
Current activity in the chain indicates that an immersive buying mentality is currently prevalent. For long-term investors, Bitcoin remains a promising investment with growth potential..
Long-term BTC holders seem confident that the flagship will increase in value in the future, as shown in the chart below. LTHs are usually better at predicting Bitcoin price movements compared to newcomers, so they are worth paying attention to.
Based on the reserve risk chart, which has been in the green zone for a while, Bitcoin appears to be an attractive risk/reward investment.
Source: LookintoBitcoin.com
Fear fades. The big players are back on the scene
Overall, crypto market sentiment has improved since mid-June, when it was in a state of panic. Even though the current score of 45 is still in scary territory, it’s a far cry from the score of 6 back then.
Source: LookintoBitcoin.com
“BlackRock has also made a big move: It recently announced that it had partnered with Coinbase to make Bitcoin purchases easier. Wall Street is slowly but steadily making its way into the crypto space. It is a well known fact that prices go up when institutional investors come into play. His foray into crypto certainly impacted the last major bull run that saw Bitcoin hit its latest ATHs.“, concluded the analyst.
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