Bitcoin surged to over $24,000 on Sunday as Ethereum prices hit a two-month high. The cryptocurrency market is continuing its impressive performance in December, with all major coins seeing substantial gains. When unexpectedly low inflation figures are published, cryptocurrencies surge in value, but the US dollar takes a hit. On August 10, Bitcoin (BTC) rose back to $24,000 but failed to break new multi-month highs.
Risk assets get a needed break after monthly CPI decreases of 0.2 percent in July and 0.8 percent in June -> Data from Cointelegraph Markets Pro and TradingView confirmed hourly gains of around $1,000 following the publication of CPI statistics for July, which revealed slower growth versus the previous month.
BTC/USD did not have enough momentum on Bitstamp to break preceding levels. However, traders appeared relieved, as falling inflation is typically a sign that the Federal Reserve will soon raise rates.
Inflation will continue to build up in the economy, with year-on-year CPI inflation coming in at 8.5 percent, 0.2 percentage points lower than expected. Monthly CPI remained unchanged from June.
The rally in risk assets continued “short term,” according to Blockware lead insights analyst William Clemente, following the print. On the back of the print, faith in the Fed diminished rapidly, as bets on a 75-basis-point increase in September were swiftly substituted with ones for only 50 basis points. “Especially for technology stocks, CPI Jul is bullish,” noted market pundit Holger Zschaepitz.
The US dollar dropped $100 in step with Ethereum’s rise, bringing it down to its lowest level since mid-March. The day saw ETH/USD rise 11.5%, reinfusing optimism that the crypto rally may be more than a fluke. “Some of you seem to have forgotten that the market can shoot up and it might not necessarily be a trap. Especially if fundamentally driven,” trader and commentator Josh Rager tweeted, adding, “if you’re trading on your emotions rather than fundamentals, this is where you’ll get hurt.”
The dollar, on the other hand, fell by 1 percent against the Australian dollar, despite the fact that the CPI release did not assist to support it. The U.S. dollar index (DXY) is “getting crushed,” according to popular trader Pierre.
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