In a couple of days, the bitcoin price climbed up to 4 percent. Soon after, the Consumer Price Index was released on Wednesday Morning. According to the CPI, inflation in the US is calculated based on the weighted average of goods and services purchased by the citizens.
The changes released had shown a significant increase to 8.5% which is quite high, but it is lower than the 8.7 that most analysts predicted and an Inflation rate of 9.1 percent in June. As per the readings released in June, It was a four-decade high.
Crypto Markets Rise As Us Inflation Slows
The Bitcoin price analysis has shown that Bitcoin increase is approximately 3 percent more than in the earlier days also, and a positive trend was seen in various altcoins also. Ethereum, the second largest cryptocurrency, rose more than 7 percent, AVAX( Avalanche chain) increased by 5 percent, Link and Matic by 3 and 5 percent subsequently.
Soon after the news a lot of traditional markets showed a positive trend and some important parameters like S&P 500, tech-heavy Nasdaq 100, and DJIA( Dow Jones Index Average) increased by 2.9, 2.1, and 1.6 percent respectively.
Crude oil and natural gas prices rose 1.2% and 5.4% respectively. But gold declined by 0.36 percent in terms of price.
The Crypto Market Responds Positively As Inflation Slows
Several news reports have shown that US inflation has caused a rise in cryptocurrency prices. As per the traders, the Bitcoin Price chart showed a spontaneous reaction soon After Consumer Price Index Report was released. The price has surpassed the 24 thousand USD mark for which it faced resistance in the past two weeks.
As discussed earlier, CPI rose to 8.5% in July, which is quite much less than what analysts forecasted. Also, this is a huge improvement on June’s 4-year high CPI.
According to the price chart, BTC candles are showing a narrowing of BTC trading range in the recent hours after the news was disclosed. Intraday traders reacted to the news and RSI moved above 70, which suggests Bitcoin was overbought. Overbought is a trading word that means an asset’s value shift has resulted in an unfavorable selling price.
Intraday traders do trading and hold assets for quite less time in a day. That overbought hourly chart signals an invader trader should quit a position, even while RSI does not.
Effects Of CPI
The September FOMC decision may have an effect on people. If FMOC increases the interest rates, then inflation is likely to increase in the coming months.