In a surprising turn of events, Bitcoin bulls are aiming for a price target of $27K despite the unexpected surge in PPI inflation. Bitcoin price gained momentum amidst market peace concerning the Federal Reserve’s interest rate policy. Despite fresh macro data indicating a resurgence in United States inflation, Bitcoin maintained its strong trajectory, reaching a new high for September – $26,762.
This strength overshadows the implications of a U.S inflation rebound, confirmed by the August prints of both the Consumer Price Index (CPI) and Producer Price Index (PPI). The PPI surpassed expectations, chalking up a 1.6% increase in comparison with market expectations of 1.3%.
In contrast to fears of more prolonged restrictive U.S. macro policy to control inflation, Crypto and conventional markets dismissed this idea. According to the FedWatch Tool of the CME Group, there is practically no consensus about the Federal Reserve raising interest rates again later this month. On the contrary, the probability of a pause in the rate hike is 97%.
There exists a conspicuous disconnect between market sentiment and the data. This disconnect was further emphasized when the European Central Bank (ECB) decided to hike rates by 0.25%. This marked the 10th consecutive rate hike, bringing rates to their highest points since 2001, in spite of the ECB’s reduction of all growth forecasts through 2025.
In the midst of these global economic developments, Bitcoin holders remain hopeful that another big step could take BTC/USD to $27,000. Yet, some analysts remain more cautious about the prospects of Bitcoin, citing the potential for a weakening support at $26k, following a relief rally. They reference a similar pattern seen in 2021 — Bitcoin’s most recent all-time high.
As the crypto world weaves its way through these market fluctuations and global economic shifts, it is clear that the journey to mass adoption is far from straightforward. The world banks contemplate lengthier pauses with elevated rates, battling inflation remains a significant challenge, and market sentiment doesn’t always align with the data. One thing remains certain, however: the ever-unpredictable journey of Bitcoin continues to captivate audiences worldwide as we all watch and learn.
Source: Cointelegraph
