In recent market developments, the U.S. Consumer Price Index (CPI) has experienced a decrease, reaching 4.9%, coinciding with a notable surge in the price of Bitcoin (BTC) surpassing the $28,000 mark. These events have sparked discussions and analysis within the financial and cryptocurrency communities, raising questions about the relationship between inflation and digital assets. This article delves into the details of the U.S. CPI decline and the significant rise in Bitcoin's price, exploring their potential implications and providing insights into the current market dynamics.

Understanding the U.S. Consumer Price Index (CPI):

The U.S. CPI serves as an essential economic indicator, measuring the average change in prices of goods and services consumed by households over a specific period. A lower CPI indicates a decrease in the rate of inflation, reflecting a potentially more stable economic environment.

Decline in U.S. CPI to 4.9%:

The recent decrease in the U.S. CPI to 4.9% suggests a moderation in inflationary pressures. This decline can be attributed to various factors, including adjustments in supply chains, shifts in consumer demand, and government policies aimed at managing inflation. The drop in the CPI is seen as a positive development, indicating a potential stabilization of prices and increased confidence in the overall economy.

Bitcoin's Price Surge Beyond $28,000:

Concurrent with the decline in the U.S. CPI, the price of Bitcoin has witnessed a notable surge, surpassing the $28,000 mark once again. Bitcoin, as a decentralized digital asset, has gained significant attention as an alternative investment and store of value. The recent price increase demonstrates the continued interest and demand for Bitcoin, driven by factors such as institutional adoption, mainstream recognition, and a growing belief in its potential as a hedge against inflation.

Inflation and Bitcoin's Appeal:

The relationship between inflation and Bitcoin's appeal has been a topic of discussion among investors and analysts. As traditional fiat currencies face the risk of devaluation due to inflationary pressures, some individuals and institutions view Bitcoin as a potential safeguard against inflation. Bitcoin's limited supply and decentralized nature make it an attractive asset for those seeking to preserve their wealth and hedge against inflationary risks.

Market Sentiment and Future Outlook:

The decline in the U.S. CPI coupled with Bitcoin's price surge has influenced market sentiment, attracting both existing and new participants to the cryptocurrency space. However, it is important to note that cryptocurrency markets are highly volatile, and price movements can be influenced by various factors beyond inflation alone. Investors should exercise caution and conduct thorough research before making investment decisions.

Conclusion:

The recent decline in the U.S. Consumer Price Index to 4.9% and the subsequent surge in Bitcoin's price beyond $28,000 highlight the interplay between macroeconomic indicators and the cryptocurrency market. While the decline in the U.S. CPI signifies a potential moderation in inflationary pressures, Bitcoin's price surge reflects its increasing appeal as a store of value and potential hedge against inflation. As these trends unfold, it is crucial for investors to stay informed, assess market dynamics, and make sound investment decisions based on their risk tolerance and financial goals.

Disclaimer: The information provided in this article is for informational purposes only and should not be considered financial or investment advice. Cryptocurrency investments carry inherent risks, and individuals should conduct their own research and seek professional advice before making any investment decisions.

#BTC #crypto2023 #cpidata #Fed #bitcoin

The Consumer Price Index (CPI) inflation in India has hit a 15-month low, falling to 5.6% in December 2022. This is a significant drop from the 6.9% recorded in November 2022 and the lowest since September 2021. While this is great news for the Indian economy, it also has implications for bitcoin and other cryptocurrencies.

Bitcoin and other cryptocurrencies have been gaining popularity in India over the past few years. Many people invest in them as a way to hedge against inflation and protect their wealth. Inflation erodes the purchasing power of fiat currencies, such as the Indian rupee, so some people turn to cryptocurrencies as a store of value that is not subject to inflationary pressures.

However, with inflation coming down, the appeal of cryptocurrencies as a hedge against inflation may also decrease. When inflation is high, people are more likely to seek out alternative investments, such as cryptocurrencies, to protect their wealth. But when inflation is low, the appeal of cryptocurrencies may be diminished, as people may feel that their purchasing power is not being eroded to the same extent as before.

Furthermore, the RBI may also have more room to maneuver in terms of its monetary policy stance, as mentioned earlier. If the RBI decides to ease its policy stance, this could lead to a decrease in interest rates and an increase in liquidity in the financial system. This could have the effect of making traditional investments, such as fixed deposits, more attractive to investors, and could potentially reduce the appeal of cryptocurrencies.

However, it is important to note that there are still many factors that make cryptocurrencies attractive to investors, even when inflation is low. Cryptocurrencies offer a high degree of privacy and security, and can be used for international transactions without the need for intermediaries. Additionally, the blockchain technology that underpins cryptocurrencies has many potential use cases beyond just financial transactions.

One such use case is decentralized finance, or DeFi. DeFi refers to a suite of financial applications built on blockchain technology that operate without intermediaries. These applications offer a wide range of financial services, including lending, borrowing, and trading, and have the potential to disrupt traditional financial systems. DeFi has been growing rapidly in popularity over the past few years, and its growth is not necessarily tied to inflationary pressures.

Another factor that makes cryptocurrencies attractive to investors is their potential for price appreciation. Bitcoin, for example, has seen massive price gains over the past few years, going from less than $1,000 in 2017 to over $60,000 in 2021. While this kind of price appreciation may not be sustainable over the long term, it is still a factor that makes cryptocurrencies appealing to some investors.

It is also worth noting that while inflation may be low in India, it is still a problem in many other parts of the world. Inflation in the US, for example, has been rising rapidly over the past few months, and this could lead to an increase in demand for cryptocurrencies as a hedge against inflation.

In conclusion, while the decrease in CPI inflation to a 15-month low of 5.6% in December 2022 may reduce the appeal of cryptocurrencies as a hedge against inflation, there are still many factors that make them attractive to investors. As always, investors should do their due diligence and carefully evaluate the risks and potential rewards before investing in cryptocurrencies.

#cpidata #investors #crypto2023 #bitcoin #US

Here are the data for the US Consumer Price Index (CPI):

The CPI is a measure of the change in prices paid by urban consumers for a basket of goods and services. The CPI for all urban consumers increased 0.1 percent in May 2023, seasonally adjusted, and increased 4.0 percent in the last 12 months, seasonally adjusted. The index of all items except food and energy increased 0.4 percent in May (SA); up 5.3 percent for the year (NSA).

The main drivers of inflation in May were housing, motor vehicle insurance, recreation, household goods and operations, and new vehicles. Housing costs rose 0.4 percent in May, buoyed by higher rents and mortgage interest rates. Motor vehicle insurance costs rose 1.1 percent in May, reflecting higher premiums. Recreation costs increased 0.6 percent in May, reflecting higher prices for amusement parks, movie tickets and sporting events. Home furnishings and operating costs increased 0.5 percent in May, reflecting higher prices for furniture, appliances and other household items. New vehicle costs rose 0.6 percent in May, reflecting higher sticker prices.

The Federal Reserve is expected to raise interest rates in an effort to combat inflation. However, it is not clear how effective this will be in slowing the pace of price increases.

months | CPI (All Urban Consumers) | CPI (All Items Less Food and Energy)

------- | ------------------------ | ------------------------

May 2023 | 304.13 | 258.83

April 2023 | 302.92 | 257.52

March 2023 | 300.71 | 255.31

February 2023 | 298.50 | 253.10

January 2023 | 296.29 | 250.90

Source:

https://www.bls.gov/cpi/

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.bls.gov/news.release/pdf/cpi.pdf

#cpidata

The latest US Consumer Price Index (CPI) inflation numbers were just released and Bitcoin (BTC), which rallied at the time to hit session highs in the $28,300s, seemed to like it.

According to the latest CPI report, headline inflation fell to 4.9% YoY in April, its first sub-5.0% reading in over two years.

That was a tad below the median economist forecast for a 5.0% YoY reading.

MoM price pressures came in at 0.4% as expected for both the headline and core inflation readings, while the YoY core inflation reading fell slightly as expected to 5.5% from 5.6% in March.

While the data demonstrated that US price pressures remain way above the Fed’s 2.0% inflation target, continued progress back towards this goal in the last year since the YoY CPI rate hit 9.1% last summer is being taken as good news by the market, likely explaining Bitcoin’s modest intra-day post-data pump.

Bitcoin has since seen a sharp reversal lower, dropping from above $28,000 to under $27,000 in a matter of minutes, perhaps as a result of US government movements of some of its Bitcoin holdings that were confiscated from Silk Road.

If the US government begins selling its BTC on masse, this could create significant, albeit short-term downside pressure on the Bitcoin price.

The latest Bitcoin price drop may well be algorithms trying to front-run a US government Bitcoin sale.

No More Fed Rate Hikes  

Investors interpreted Wednesday’s CPI data as lowering the likelihood that the Fed lifts interest rates by a further 25 bps at its June policy meeting.

According to the CME’s Fed Watch Tool, the implied odds that the Fed holds interest rates for the first time in eleven meetings next month is around 95%, up from under 80% prior to the data’s release.

Markets also upped their bets on how many rate cuts the Fed will have embarked upon by the time December 2023 comes around.

As per the CME’s Fed Watch Tool, implied odds that the Fed will cut rates at least 75 bps from current levels (i.e. from 5.0-5.25% to 4.25-4.5% or below) by December are currently close to 75%, up from around 55% prior to the latest CPI report.

Many economists expect that the delayed impact of the Fed’s aggressive rate hiking cycle of 2022/early 2023, combined with the new headwind of a contraction in lending as a regional bank crisis bubbles, will have sent the US economy into recession in the second half of this year, and that the Fed will have to respond with rate cuts.

What Next for Bitcoin (BTC)?

The latest US data keeps alive the dominant macro narrative that easier monetary policy conditions are coming.

While Bitcoin, which appears to have lost short-term positive technical momentum, may well remain choppy in the coming days and weeks as concerns about a BRC-20 fuelled transaction fee spike keep investors hesitant, the cryptocurrency's longer-term bull market thesis should remain intact.

Easier monetary policy conditions tend to benefit Bitcoin, which has had a strong positive correlation to US liquidity conditions in recent history.

BTC/USD appears to have formed a pennant structure since its mid-March pump that could break either to the upside or downside in the near future.

And with the cryptocurrency having recently lost its grip on both its 21 and 50-Day Moving Averages, some technicians have been predicting a near-term retest of key support in the $25,000s.

But even if Bitcoin did test these levels, the 2023 uptrend wouldn’t yet be under threat.

Indeed, many think that Bitcoin is in the early stages of a new bull market cycle, with various on-chain indicators and longer-term market cycle signals suggesting as much.

Meanwhile, as long as the US bank crisis continues to bubble under the surface, that should underpin demand for “hard money” alternatives to fiat, like Bitcoin and gold.

source: cryptonews

image source: ai

#cpi #cpidata #dyor #crypto2023 #BTC

Disclaimer

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

US inflation remains well above the Fed’s target

The disinflationary momentum continues  

US dollar buyers are likely to emerge as more rate hikes are likely 

Last week, the Federal Reserve of the United States signaled its willingness to pause the rate hiking cycle. It said that the committee would remain data dependent. 

Well, data shows that the Fed is likely to keep raising rates. Yesterday, the US inflation report for April was released. 

While the annualized inflation keeps decreasing, it remains well above the Fed’s target. Coupled with the resilient jobs market, it gives the Fed the green light for more tightening. 

Bitcoin followed a similar path to fiat currencies. The US dollar is up and trending higher, as seen by the AUD/USD exchange rate unable to keep above 0.68 and down now about 100 pips points. 

But for Bitcoin, the bearishness appears to be more accentuated. A head and shoulders pattern indicates a drop to $24k, should the US dollar’s momentum continue. 

Bitcoin chart by TradingView

Technical analysis favors a drop to $24k

Bitcoin failed at 30k after a strong rally in 2023. One can spot a bearish technical pattern – a head and shoulders. 

The measured move, seen in blue, points to a drop to $24k, an area that offered resistance in the past. Therefore, according to the interchangeability principle, it should offer support the first time it will be retested. 

Bitcoin followed the US dollar, and the events in the traditional financial markets influenced how Bitcoin moved. Yesterday’s inflation report shows that the Fed will likely continue to raise interest rates, so the downside is the path of least resistance for Bitcoin. 

source: coinjournal

image source: ai

#cpidata #inflation #BTC #analysis #dyor

Disclaimer

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Bitcoin and cryptocurrency traders are eagerly anticipating the outcome of today's Federal Open Market Committee (FOMC) meeting conducted by the US Federal Reserve (Fed). Scheduled for 2:00 pm EST, the release of the interest rate decision will be followed by a press conference at 2:30 pm EST. This event holds significant importance as it is expected to influence the market in the coming weeks.

The prevailing sentiment among experts suggests that the Fed will opt for a pause in rate hikes. The CME FedWatch tool currently indicates a 95.3% probability of no change in interest rates. By maintaining the current levels, the central bank will have more time to assess the impact of its efforts to combat inflation.

Notably, major banks such as Goldman Sachs, J.P. Morgan, and Morgan Stanley share this expectation, except for Citi, which anticipates another 25 basis point rate hike. The crucial aspect to watch for during the meeting is the release of the "dot plot," which represents the Fed members' projections of future interest rate trajectories. Any upward revisions in these projections could lead to a decline in equities and an increase in the dollar index (DXY), potentially affecting the Bitcoin and cryptocurrency markets in a similar manner.

While the US bond market currently anticipates another rate hike by the Federal Reserve and a subsequent rate cut by the end of 2023, experts believe the outcome could be more binary. Michael Contopoulos, director of fixed income at Richard Bernstein Advisors, suggests that either the Fed will refrain from cutting rates, or a significant economic slowdown would prompt aggressive cuts. His inclination is toward the former scenario, speculating that higher-than-expected Consumer Price Index (CPI) data might push the Fed towards a hike. However, if CPI remains within expectations, a pause is more likely.

The bond market's current pricing indicates a prediction of 200 basis points in rate cuts for 2024, implying that a recession might not materialize until next year. This outlook aligns with the assessment of several experts.

Nevertheless, it should be noted that a rate hike by the Fed after a pause is not entirely implausible. The Bank of Canada (BoC) serves as an example, having raised rates by 25 basis points in June despite a two-month pause. The CME FedWatch Tool assigns a 63% probability of another quarter-point rate hike in July. Consequently, the "dot plot" released during today's FOMC meeting could significantly impact equities, #bitcoin , and the broader crypto market, depending on the direction of the revisions.

At the time of writing, Bitcoin remains relatively stable ahead of the interest rate decision. In the 1-hour chart, there is a promising possibility of a breakout from the current mini range around the FOMC meeting, triggering increased .

#coingabbar #BinanceTournament #BTC #cpidata

Hello friends how are you all. The market goes out of control as the CPI data comes in around this time of the month. And besides that there is sec. So what do you think the market will be after the report? This time the question is up to you. You can comment.#googleai #cpidata