Bitcoin (BTC) has regained the 24,000 US dollar mark on today, August 10, after it was reported that inflation in the US seems to be slowly easing.
Bitcoin Price Chart (Bitstamp). Source: TradingView
Positive inflation figures provide relief
As the data from Cointelegraph Markets Pro and TradingView show, after the release of the new American inflation figures, the Bitcoin price was able to increase by $ 1,000 in the shortest possible time, because the consumer price index (CPI) for July suggests a slowdown in the devaluation of purchasing power compared to the previous month.
But even the interim daily high of Bitcoin at 24,179 US dollars was not enough to lift the market-leading cryptocurrency over the important major hurdles in the immediate vicinity.
Nevertheless, the relief among investors on this “important day” was tangible, because a slowdown in inflation is likely to mean that the US Central Bank is slowly moving away from its restrictive monetary policy of raising key interest rates again. This, in turn, should take pressure off the high-risk investment products such as Bitcoin.
In direct comparison with the previous year, the CPI is 8.5% – that is, 0.2% below expectations – while there is no real change compared to June.
Over to you Sir Powell, you know what to do. pic.twitter.com/qwMbdtriNm
– Arthur Hayes (@CryptoHayes) August 10, 2022
“The markets now clearly have room for improvement again, until the central Bank asks for the sentiment picture in just under a week. But I expect that these figures will be much weaker“” says Raoul Pal of Global Macro Investor. To which he appends:
“After decreasing inflation usually comes the fear of decreasing growth, but I think that the markets as a whole will react positively to weak growth, generally speaking.“
Meanwhile, blockware analyst William Clemente is much more cautious and believes that there is still a risk of further losses for the high-risk financial products, at least in the “short term”.
After all, the majority quickly expressed the hope that the US Central Bank will loosen the thumbscrews a little again, so the first bets on the planned key rate increase in September have been reduced from 75 basis points to 50 basis points.
“The CPI for July is particularly good for tech stocks,” as WELT economics editor Holger Zschäpitz notes.
Dollar gets “under the wheels”
Ethereum (ETH), meanwhile, was able to benefit even more from the new inflation figures than the market leader, so the largest altcoin was able to climb to the highest level since the beginning of June after the release.
With the jump to 1,847 US dollars, the Ethereum price has gained a whopping 11.5% on Wednesday, which reinforces the hopes that the current climbing game is more than a mere straw fire.
“Some of you seem to have forgotten that the market can also make an upswing without this being a bubble, especially if the fundamentals underpin it,” as analyst Josh Rager notes in this context.
Ethereum Price Chart (Binance). Source: TradingView
The clear day loser, on the other hand, was the US dollar, which has continued its decline since mid-July after the CPI data became known.
For example, the US Dollar index (DXY) is down another 1.3%, which at the same time brings it close to the 100-day Moving Average (MA).
$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
– Bierre (@pierre_crypt0) August 10, 2022
Sven Henrich, the founder of the analysis service Northman Trader, says that the DXY is literally “getting under the wheels”.