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Bitcoin is CPI resistant, with a slight drop to around $29.5K

In this post:

  • Bitcoin seems unaffected by the latest CPI data, which showed a modest amount of CPI growth that was in line with what economists predicted.
  • Aside from macroeconomic factors, analysts continue to debate why Bitcoin won’t budge above $30,000.
  • The U.S. headline CPI released by the Labor Department on Thursday gained 0.2% in July, raising the inflation indicator to 3.2%.

Bitcoin and ether open unchanged in Asia, undoubtedly unaffected by the latest Consumer Price Index (CPI) data. The two largest cryptocurrencies continue to withstand macro-scale surges.

CPI is one of the Federal Reserve’s primary considerations when determining interest rate policy. Last month’s June report was the lowest in two years, and broad expectations point to another decline in July. And these predictions were accurate.

Bitcoin reacts to the new CPI data

On Friday morning in Asia, Bitcoin fell below the US$29,500 threshold. As the top 10 non-stablecoin crypto coins traded unevenly, Ether also declined. In the short term, market experts anticipate Bitcoin and Ether to remain stable ahead of a potential rally supported by alleviating macroeconomic conditions. 

According to CoinMarketCap data, Bitcoin declined 0.39% in the last 24 hours to US$29,439.41 as of 6:30 a.m. in Hong Kong but gained 0.95% for the week. Following an overnight peak of US$29,688, the largest crypto by market cap hovered around the US$29,500 threshold.

The latest Consumer Price Index (CPI) data showed a modest level of CPI growth that was consistent with what economists had predicted.

The Consumer Price Index (CPI) increased by 0.2% in July, and the Core CPI, which excludes food and energy, also rose by 0.2%. As part of its ongoing policy to combat inflation, the Federal Reserve is less likely to raise interest rates in September as a result of a 3.2% increase in the CPI and a 4.7% increase in the Core CPI.

In addition to macroeconomic factors, analysts continue to ponder why Bitcoin has not risen above $30,000.

The headline Consumer Price Index (CPI) released by the U.S. Department of Labour on Thursday increased by 0.2% in July, bringing the inflation rate to 3.2%. This is less than the 3.3% forecasted by Reuters.

Factors affecting Bitcoin’s price movement

According to recent reports, analysts and stakeholders at crypto trading firms continue to point to the uncertainty surrounding the SEC’s approval of a spot bitcoin ETF, miners profiting ahead of the Bitcoin halving, a lack of new retail market participation, and strong resistance in derivatives trading, all of which contribute to a tight trading range and suppressed volatility.

Despite the fact that many adrenaline-addicted crypto traders miss volatility, bitcoin is certainly looking like a good store of value these days.

On the market calendar, analysts have also circled August 13, the next deadline for ARK Investment Management’s spot Bitcoin exchange traded fund (ETF) application in the U.S.

ARK initially submitted the application in April, followed by a subsequent amendment in July.

Cathie Wood, chief executive officer of ARK Invest, told Bloomberg on Monday that the U.S. Securities and Exchange Commission will likely approve multiple spot crypto ETF applications simultaneously if it decides to approve them.

Friday saw uneven trading in the top 10 non-stablecoin cryptocurrencies. Solana led the gainers with a 1.59% increase to US$24.70 and a bullish weekly gain of 9.56 %. Tron rose by 1.15 percent to US$0.07717, a gain of 0.52% over the past week.

In the previous twenty-four hours, the total market cap of cryptocurrencies fell 0.24% to $1.17 trillion, while trading volume fell 26.24 percent to $26.47 billion.

Moving forward, SEC vs. Ripple-related chatter, ETF updates, and Binance and Coinbase (COIN)-related news will influence the market. However, US legislator discussion and SEC activity must also be taken into account.

In addition, investors should evaluate the US PPI Report during the afternoon session. A rise in inflationary pressure would increase the likelihood of a September Fed rate hike, which could exacerbate recessionary fears.

Thursday, in an interview with Yahoo! Finance, Mary Daly, president of the San Francisco Fed, stated that the latest CPI data does not indicate that the central bank has conquered inflation. She added that the Federal Reserve remains fully committed to achieving its inflation objective of 2%.

The Fed will meet on September 19 to determine the next move for interest rates, which are currently between 5.25 and 5.50 percent, the highest level in the past 22 years. The CME FedWatch Tool predicts an 89.0% probability that there will be no increase in interest rates in September, up from 87.0% on Thursday.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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