Analysis of the direction of#BTCin the last months of the year

Yesterday, the CPI (consumer price index) was announced at 2.5%. So what does it reflect?

To answer this question, we must look at the whole picture starting from 2016. From 2016 to about April 2021, the US CPI, also known as inflation, fluctuated between -0.1% and 3%, mostly 1.8% -2% as shown in the chart below. From May 2021, the CPI began to increase rapidly (2020-2021 was a severe Covid epidemic), the CPI peaked at 9.1% in July 2022, it should be noted that in the 2008 crisis, the CPI also peaked but only at 5.6%. That's why this inflation is considered "terrible".

In macroeconomics, inflation is a continuous increase in the general price level of goods and services over time and a loss of value of a currency. USD is losing value!

So we have to make USD increase in value. That is, tighten supply, increase demand for USD. That is the beginning of increasing interest rates, increasing interest rates, widening the interest rate gap between countries, for example, the US and Japan, the US interest rate is more than 5%, Japan's interest rate is 0%, so many entities sell JPY to buy USD to store for profit. From March 16, 2022, the FED started to increase interest rates from 0.25% to 0.5%, at that time CPI inflation was very high at 7.5%, continuously in the following months the interest rate increased sharply to 5.5% and remained at this level until now.

This drastic increase in interest rates has been highly effective in curbing inflation as shown in the first figure, CPI has decreased from 9.1% to 2.5%. It is time to cut interest rates in the last months of the year and early next year. According to the forecast, there will be two cuts this year, in September and December.

If USD interest rates are cut, more money will flow into the market and take refuge in other assets.

That is a good signal for the asset market in the last months of 2024. The direction of BTC will be analyzed in the next article.