Bitcoin (BTC) surpassed $22,000 even though the January US Consumer Price Index (CPI), released on Wednesday, did not slow as much as expected. Over 3% increase in 24 hours.
It has traded below $22,000 for the past five days amid growing investor concerns about stablecoins and the Fed’s efforts to combat inflation.
The US CPI rose 0.5% month-on-month in January, up 0.1% in December, in line with economists’ expectations. However, on a year-on-year basis, it rose 6.4% from December’s 6.5% rise, beating expectations of 6.2%, suggesting inflation has not slowed as much as expected. Core CPI (excluding volatile food and energy) was 5.6% YoY. It was down from 5.7% the previous month but beat expectations of 5.5%.
Those numbers suggest the Fed may keep its hawkish stance on its sights on further interest rate hikes at the next FOMC meeting. About 90% of traders expect a 0.25% rate hike at the FOMC in March, according to CME FedWatch.
“The market may have priced in a bit more Fed tightening, but it hasn’t weighed heavily on crypto as it stands now, as regulation and contagion risks (such as the FTX collapse) weighed on Bitcoin this month. , the potential downside has been exhausted,” Oanda Senior Market Analyst Edward Moya wrote in a note Wednesday.
Ethereum (ETH) has risen about 5% above $1,550, recouping losses of recent days. The CoinDesk Market Index, which measures the performance of the entire cryptocurrency market, rose 3.7%.
Stock markets were mixed, with the S&P 500 up 0.1%, the Dow down 0.2% and the Nasdaq up 0.6%.
Joe DiPasquale, CEO of BitBull Capital, said he wouldn’t be surprised if the post-CPI gains were wiped out by the end of the week. He stressed that while crypto assets have so far risen since the CPI announcement, “they will fall in the next few days.” DiPasquale said he expects Bitcoin to test $20,000 and Ethereum to test $1,250.
Michael Safai, managing partner at Dexterity Capital, said regulation currently trumps inflation concerns in the cryptocurrency market.
“Inflation data and the Fed meeting are no longer having the same impact on crypto asset prices as they were in 2022, as regulation has accelerated to have a significant impact on crypto sentiment,” Safai said.
STORM Partners managing partner Sheraz Ahmed said Bitcoin’s recent drop and Tuesday’s rally were “relatively mild, only a few hundred dollars each.”
“It was the mildest CPI announcement in recent months. December’s CPI slowed, which partly led to cryptocurrency gains in January. It may become impossible,” Ahmed said.
|Translation: coindesk JAPAN
|Editing: Takayuki Masuda
| Image: CoinDesk
|Original: Bitcoin Rebounds Above $22K After Tepid Inflation Readings
Bitcoin Recovers $22,000 -- US CPI Exceeds Expectations | coindesk JAPAN | Coindesk Japan appeared first on Our Bitcoin News.
