In the hours leading to the release of U.S. CPI data, Bitcoin stands strong at $25,933, symbolizing a 0.66% rise in the last 24 hours. This stability in the cryptocurrency market seems undeterred by the predicted bump in CPI growth for August, spurred by escalating oil costs, with WTI Crude Oil brushing the 2023 peak of $89 per barrel.
Stepping into the crypto index landscape, the CoinDesk Currency Select Index (CCYS) records a humble 1% rise, positioning at a pleasing 1,195.80. Concurrently, ether stands tall at $1,593, in spite of experiencing a 2.2% setback in the preceding week.
Despite the broad optimism, Bernd Sischka, Chief Commercial Officer at PowerTrade, regards the rapid rally as a result of short covering and liquidity crunch, rather than a real reorientation from bearish to bullish sentiments. To foresee a continued upbeat momentum in Bitcoin’s value, Sischka believes that a steady close above the critical resistance levels of $26,440 and $26,450 is essential.
Falling on the other side of the spectrum is Curve’s CRV token, trending downwards at $0.39, echoing a 3.3% depreciation. This slump attributes to multiple factors like the coin influx on exchanges, major holders decreasing their holdings, alongside recent negative events, including a DeFi exploit and the founder’s significant token sale.
With regards to inflation, FactSet research shows a significant decline in S&P 500 companies mentioning “inflation” during their Q2 earnings calls, thereby indicating a weaker stock price performance.
In a rather eye-opening keynote at Korea Blockchain Week, Arthur Hayes, the founder of BitMEX, and the current Chief Investment Officer at Maelstrom, terms the relationship between CPI, inflation, and crypto prices as evolving. Despite the Federal Reserve’s rigorous rate hikes to cushion inflation, cryptocurrencies have revealed surprising resilience. According to Hayes, these rate hikes have paradoxically fueled economic growth by stimulating spending and nominal GDP growth – an outcome that was unanticipated based on traditional economic theories.
Lastly, Hayes suggests that irrespective of whether the Fed makes any rate adjustments, the vibrant cryptocurrency industry finds itself in an advantageous position. Certainly, while positivity reigns supreme in this landscape, the need for meticulous vigilance can’t be underestimated.
Source: Coindesk
