On Monday, we witnessed the largest liquidation of the year in the leveraged market, with positions worth over $1.5 billion being closed. Although this retraction had some impact on Tuesday, things returned to normal by Wednesday. While the consumer price index (CPI) continued to rise, as expected, the interest rate cut due next week seems almost certain.
The price of Bitcoin (BTC) has once again broken through the $100,000 level. Several altcoins have seen gains of 20-30%. Bitcoin, which has seen a 150% increase in the past 12 months, broke through the psychologically significant $100,000 level a week ago and rallied all the way to $104,000. During the subsequent pullback, the leading cryptocurrency started to rally at $95,000 before finally reaching $102,000 by Wednesday evening.
Despite the correction, Bitcoin ETFs saw almost $1.14 billion in net inflows this week. The macroeconomic reason for the increase is the expected evolution of the consumer price index (CPI). Although the 2.7% increase compared to November 2023 is considered the worst data in the last four months, core inflation seems to have stabilized at 3.3% on an annual basis.
This makes it almost certain that next week’s FOMC meeting the US central bank will continue with a 25 basis point interest rate cut, reducing the benchmark interest rates to 4.25-4.50%. CME Group currently sees a 98.6% chance of this happening. However, billionaire investor Ray Dalio warns of a possible “debt crisis” that could trigger a sharp decline in the value of the dollar.
According to Dalio, the US debt has grown exponentially in recent years, reaching over $34 trillion by early 2024. Stimulus measures related to the COVID-19 pandemic, prolonged war, and supply chain problems have led to massive government spending that has fueled the out-of-control inflation seen in 2022.
In addition to the two biggest representatives of value stability, altcoins are also producing explosive growth. While the price of BTC only increased by 3% in the last 24 hours, Ethereum (ETH) increased by 7% in the same period. If ETH is able to regain the $4,000 level, it could lead to a parabolic rise in altcoins.
In the last 24 hours, Sui increased by 32%, while Aave and Chainlink increased by 30% each.
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<p>The post Bitcoin Soars Above $100,000: Inflation and Rate Cuts Drive Crypto Boom first appeared on CoinBuzzFeed.</p>
