Bitcoin price hits $24,000 and Ethereum hits a two-month high as US inflation eases

Lower-than-expected inflation data sparks an instant rally for cryptocurrencies, while the US dollar pays the price.

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.

Nonetheless, relief among traders was palpable as the decline in inflation should signal to the Fed that a less aggressive 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.

“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, describing the rally in risk assets as “short-term” following 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 tech 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.

However, 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.

Sven Henrich, founder of the analysis firm NorthmanTrader, described DXY as “crushed”.

Reference: es.cointelegraph.com

Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.

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