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.
Over to you Sir Powell, you know what to do. pic.twitter.com/qwMbdtriNm
— Arthur Hayes (@CryptoHayes) August 10, 2022
“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…
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