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Bitcoin price hits $24,000, Ethereum hits 2-month high as US inflation eases

Bitcoin price hits $24,000, Ethereum hits 2-month high as US inflation eases

Bitcoin (BTC) rallied back to $24,000 but failed to hit new multi-month highs on August 10th now that US inflation appears to be easing.

1-hour candlestick chart of the BTC/USD pair (Bitstamp). Source: Trade View

CPI brings much needed relief to risky assets

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 reached $24,179 on Bitstamp, the BTC/USD pair, however, did not gain enough momentum to challenge the previous day’s levels.

However, traders’ relief was visible as falling inflation should signal to the Federal Reserve that less aggressive interest rate hikes are needed in the future. This, in turn, should reduce pressure on risky assets, including cryptocurrency.

Year-on-year CPI inflation came in at 8.5%, 0.2% lower than expected, and month-on-month the figure was unchanged from June.

It’s up to you, Mr. Powell, you know what to do. pic.twitter.com/qwMbdtriNm — Arthur Hayes (@CryptoHayes) August 10, 2022

“The markets are clearly now heading to the regional Fed surveys in a week or so. I expect they will be much weaker,” said answered Raoul Pal, founder of Global Macro Investor.

“Peak inflation gives way to fear of peak growth. I think the markets will generally respond positively to weak growth, not negatively. »

Blockware senior analyst William Clemente was more cautious, describing the rally in risk assets as a continuation “in the early term” after the release.

Faith that the Fed will end its aggressive cycle of interest rate hikes almost immediately gained, as bets on a 75 basis point hike in September were sharply cut in favor of 50 basis points.

“July CPI is bullish, especially for tech stocks,” it said added Holger Zschaepitz, market commentator.

The dollar is gaining momentum as Ethereum reaches a multi-month high

More than bitcoin, Ether (ETH) celebrated the CPI event and took advantage of the mood to post its highest levels since June 7.

ALSO READ: Bitcoin Dominance Hits 6-Month Low as Metrics Announce New “Alternative Season”

At $1,847, ETH/USD gained 11.5% on the day, fueling hopes that the cryptocurrency’s rally may be more than a sham.

“Some of you forget that the market can pump and that’s not really a trap. Especially if it’s fundamentally focused,” said tweeted trader and commentator Josh Rager.

ETH/USD 1-day candlestick chart (Binance). Source: Trade View

One of the big losers on the day, however, was the US Dollar, which added to the slump that had been in place since mid-July following the release of the CPI.

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

$DXY – D1. Hard to make clearer / cleaner, I think Trend Analysis also works on US ponzi. Until the D1 trend recovers, I think the D1 100 MA @ 103-104 is possible but what I know. https://t.co/FeGFYBFcdi pic.twitter.com/lhQEcbIxTK — Beer (@pierre_crypt0) August 10, 2022.

Said Sven Henrich, founder of the analysis firm NorthmanTrader Put down the DXY as “getting crushed”.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Cointelegraph.com. All investment and trading involves risk. You should do your own research before making a decision.

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