Bitcoin price sees $24K, Ethereum hits 2-month high as US inflation shrinks

XRP

Bitcoin (BTC) regained $24,000 but failed to hit new multi-month highs on Aug. 10 as United States inflation appeared to be slowing.

CPI cuts risk assets much-needed slack

Data from Cointelegraph Markets Pro and TradingView confirmed hourly gains of around $1,000 after U.S. Consumer Price Index (CPI) data for July showed a slowdown versus the previous month.

While managing $24,179 on Bitstamp, BTC/USD nonetheless did not attract enough momentum to challenge levels from the day prior.

Nonetheless, relief among traders was palpable, as declining inflation should signal to the Federal Reserve that less aggressive interest rate hikes are necessary going forward. This should in turn reduce pressure on risk assets, including crypto.

Year-on-year CPI inflation came in at 8.5%, 0.2% below expectations, while month-on-month, the figure was unchanged from June.

“Markets now have a pretty clear run until regional Fed surveys in a weeks or so. I expect those to be significantly weaker,” Raoul Pal, founder of Global Macro Investor, reacted.

“Peak inflation gives way to peak growth fear. I do think markets will react positively to weak growth, not negatively, broadly speaking.”

Blockware lead insights analyst, William Clemente, was more cautious, describing the rally in risk assets as continuing “short term” on the back of the print.

Faith in the Fed cooling its aggressive rate hike cycle meanwhile played out almost immediately, with bets of a 75-basis-point hike in September starkly reduced in favor of 50 basis points.

“Jul CPI is bullish especially for tech stocks,” markets commentator Holger Zschaepitz added.

Dollar dives in step as Ethereum beats multi-month best

Celebrating the CPI event more than Bitcoin, meanwhile, was Ether (ETH), which capitalized on the mood to post its highest levels since June 7.

Related: Bitcoin dominance hits 6-month lows as metric proclaims new ‘alt season’

At $1,847, ETH/USD gained 11.5% on the day, fueling hopes that the crypto rally could be more than a fakeout.

“Some of you forget that the market can pump and it actually not be a trap. Especially if fundamentally driven,” trader and commentator Josh Rager tweeted.

A clear loser on the day, however, was the U.S. dollar, which extended a downtrend in place since mid-July on the CPI print.

The U.S. dollar index (DXY) lost 1.3%, now targeting its 100-day moving average, according to popular trader Pierre.

Sven Henrich, founder of analytics firmNorthmanTrader, described DXY as “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, you should conduct your own research when making a decision.

Articles You May Like

Over 1.8 Million Addresses Bought 52 Million ETH At $2,350: Will Ethereum Continue Falling?
Ripple Receives License To Offer Payments Direct Service In The UAE
Ripple Vs. SEC Battle Rages On: CEO Fires Back At Regulator For Appealing Court’s Decision
Is Crypto Losing Steam? Bitcoin And Ethereum Addresses Shrink In 2024
Ethereum At Risk Of Further Decline: Top Investor Sets $2,150 Target If Support Breaks