Bitcoin (BTC) gained $24,000 but failed to hit a new multi-month high on August 10 as inflation in the United States was slowing.
CPI cuts risky assets much needed slack
Data from Cointelegraph Markets Pro and TradingView confirmed hourly gains of around $1,000 after data from the US Consumer Price Index (CPI) for July showed a bearish comparison over the previous month.
Managing $24,179 on Bitstamp, BTC/USD still didn’t attract enough momentum to challenge the levels the day before.
Nonetheless, relief was evident among traders, as a fall in inflation should signal to the Federal Reserve that less aggressive interest rate hikes are necessary. This should ease pressure on riskier assets, including crypto.
Year-on-year CPI inflation came in at 8.5%, 0.2% lower than expected, while month-on-month, the figure was unchanged from June.
Sir Powell, you know what to do. pic.twitter.com/qwMbdtriNm
— Arthur Hayes (@CryptoHayes) 10 August 2022
“Markets now have a very clear run in a week or two until regional Fed surveys. I expect them to be pretty weak,” Raul Pal, founder of Global Macro Investor, said. reacted,
“Peak inflation gives way to extreme growth fear. I think the market will respond positively to weak growth, not negatively, broadly.”
Blockware Lead Insights analyst William Clemente was more cautious, Description of Rally in riskier assets as “short term” trailing print continues.
Confidence in the Fed cooling its aggressive rate hike cycle meanwhile played out almost immediately, with the stakes for a 75-basis-point hike dwindling in favor of 50 basis points in September.
“July CPI is particularly bullish for tech stocks,” market commentator Holger Zaschaepitz couple,
Dollar dives in move as Ethereum beats multi-month best
Meanwhile, celebrating the CPI event compared to bitcoin, was ether (ETH), which capitalized on the mood, posting its highest level since June 7.
RELATED: Bitcoin dominance hits 6-month low as metric announces new ‘alt season’
At $1,847, ETH/USD gained 11.5% on the day, raising hopes that the crypto rally could be more of a fake.
“Some of you forget that the market can pump and it’s not really a trap. Especially if driven fundamentally,” trader and commentator Josh Rager tweeted,
However, a clear loser on the day was the US dollar, which extended a downtrend from mid-July on the CPI print.
According to popular trader Pierre, the US Dollar Index (DXY) is down 1.3%, which is now targeting its 100-day moving average.
$dxy – D1
It’s hard to make it clearer/cleaner, I think simple TA also works on US Ponzi.
I think D1 is doable @ 100 mA @ 103-104 until D1 trend retests but what do I know. https://t.co/FeGFYBFcdi pic.twitter.com/lhQEcbIxTK
— bierre (@pierre_crypt0) 10 August 2022
Sven Heinrich, founder of analytics firm Northman Trader, described DXY as in “getting crushed.”
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, so you should do your own research when making a decision.
