After the positive movements in January, the prices of the two leading cryptocurrencies have stagnated again in the last week. The price of Bitcoin dropped a few percentage points again. The reason for these developments could be the upcoming release of US inflation data.
The short rally of 2023 – is it over already?
The year 2023 started with a bull run for Bitcoin and Ethereum. The crypto market has been weak for the past year. Some of the culprits were the difficulties in the economy and the FTX crisis, which caused a price drop in November.
But just a few days after the turn of the year, there were exciting movements. Bitcoin literally jumped from the mark 15,000 euros to about 20,000 euros. After a few attempts to break that mark, he finally did it in mid-January.
The Bitcoin course followed just as quickly. It broke the important support mark of 21,000 euros at the end of the month. He was able to stay above this mark until February 9th. The slight decline earlier this month is again due to policy rates. The FED raised it again on the 2nd by 0.25 percentage points. Despite the announcement to significantly reduce the speed here.
If you look at the Ethereum course, a similar picture emerges. The price of ETH has also increased rapidly since January 9th. It climbed to a value of over 1,450 euros within a few days. It then broke through the EUR 1,500 mark at the beginning of the month.
Despite some small ups and downs in early February, the price managed to stay above the EUR 1,500 mark. But just like Bitcoin, Ethereum fell again on January 9 and went to around 1,420 euros. Today, the price of bitcoin is at $23,000 after falling another 2 percentage points. The market capitalization also fell by 1.80 percentage points and is now at 391 billion euros.
The Ethereum price today is 1,390 euros. It has fallen almost 4 percentage points in the last 24 hours. Here, too, the market capitalization fell slightly.
If you look at the pictures of the courses at the moment, you assume at first glance that the first rally for this year is over. But the drop in prices doesn’t necessarily mean a renewed shaving market will emerge. The reason for the current picture is probably the upcoming date when traders and investors are expecting important data.
US inflation data to be released on Tuesday
Cryptocurrencies are dependent on countries’ economies. This has been particularly evident over the past year. After each Fed announcement, bond prices responded immediately. Although people seemed to be used to the regular increases in 2022, the developments continue to affect the values.
Another important aspect is the development of inflation data. These go hand in hand with the increase in the prime interest rate. The Fed regularly raises this to lower inflation in the US.
Depending on how these two values relate to each other, it is possible to speak of a certain stability of the economy. Or the opposite develops and the stock and crypto market threatens to fall again.
— Davis Lark (@TheCryptoLark) February 9, 2023
The other points about inflation rates are the more concrete consequences they involve. Due to the high inflation that occurred last year, the cost of living rose significantly. This means that a large number of small investors may have to withdraw from the crypto market altogether. There was just less money left to invest in cryptocurrencies. The financial uncertainties also meant that more and more people had to go to their savings. For some, this includes Bitcoin and Co.
Inflation data is regularly released at the beginning of the following month. So in January the data for December 2022 was released. The data released so far shows that the inflation rate in the US has been slowly falling since September.
In December 2022, the percentage was 6.5. The aim is for this value to continue to decrease. Since prices have always reacted strongly to this important data, it is understandable that investors and traders are hesitant in the days leading up to this announcement.
The inflation rate: This could continue for Bitcoin and Co
Speculation about the upcoming dates varies widely. First, the FED announced that it intends to increase the main interest rate much more slowly in the future. Now it has been raised again by 0.25 percentage points.
However, some investors assume that the main interest rate can be lowered again at the end of this year. However, inflation plays a big role in this. If this were to actually fall further, the case that the main interest rate would also fall could come into play.
Cryptocurrencies could then take advantage of this again. If positive news is transmitted tomorrow, Bitcoin may rise again in a positive direction after a short downward step. If you look at the performance of the last month, it can be estimated that it will get a renewed boost due to a falling inflation rate and rise to over 22,000 euros.
That in turn would also drive up the price of Ethereum. This could compensate for the past corrections through a bull run and rise again to above 1,550 euros.
However, the expected dates are difficult to predict. The figure for the inflation rate has been falling in the US since September. This gives hope that this curve will be maintained. In Germany, on the other hand, where the data for January 2023 has already been published, a small increase of 0.1 percent can be observed again.
So tomorrow Tuesday will be an important day for the US economy and both the stock and crypto market. The published data could again lead to a renewed bull run or the issues and lead to a fall in prices.
The data also affects current pre-sales. Among other things, the MEMAG token could benefit from a bullish crypto market.
MEMAG pre-sales are almost complete
USD 1.2 million worth of tokens were sold during the MEMAG presale. This will end in four days. Meta Masters Guild will soon become an ecosystem where gamers can become game developers. In gaming applications, the focus will be on Play and Earn version. Currently, investors can buy the coin at a price of $0.023.
Photo by engin akyurt