Inflation
Bitcoin ‘bear trap’ sees BTC price near $20K as daily gains top 9%
Bitcoin (BTC) delivered more surprises into Oct. 14 as the reaction to macro triggers saw a sudden run at $20,000. BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView Stocks, crypto smoke shorts Data from Cointelegraph Markets Pro and TradingView showed BTC/USD climbing to one-week highs, gaining almost $2,000 in hours. After the United States Consumer Price Index (CPI) print for September came in above expectations, an initial crypto rout put bulls on edge, but the pain was short lived. Bitcoin ultimately ran higher than its pre-CPI levels, following stocks which were described as delivering the “biggest bear trap of 2022.” “That’s gotta be the biggest bear trap I’ve seen so far,” popular Twitter trading account Stockrocker reacted. “Even I was starti...
Bitcoin traders were ready for a hot CPI report, but BTC bears are still in control
Cryptocurrency traders were caught by surprise after the Oct. 13 Consumer Price Index Report showed inflation in the United States rising by 0.6% in September versus the previous month. The slightly higher-than-expected number caused Bitcoin (BTC) to face a 4.4% price correction from $19,000 to $18,175 in less than three hours. The abrupt movement caused $55 million in Bitcoin futures liquidations at derivatives exchanges, the largest amount in three weeks. The $18,200 level was the lowest since Sept. 21 and marks an 8.3% weekly correction. Bitcoin/USD 1-hour price. Source: TradingView It is worth highlighting that the dip under $18,600 on Sept. 21 lasted less than 5 hours. Bears were likely disappointed as a 6.3% rally took place on Sept. 22, causing Bitcoin to test the $19,500 resi...
What is the economic impact of cryptocurrencies?
Although the cryptocurrency market appears to grow in a positive feedback loop, that does not mean that (un)expected events may not impact the trajectory of the ecosystem as a whole. Although blockchain and cryptocurrencies are fundamentally meant as ‘trustless’ technologies, trust remains key there where humans interact with one another. The cryptocurrency market is not only impacted by the broader economy, but it may also generate profound effects by itself. Indeed, the Terra case shows that any entity — were it a single company, a venture capital firm or a project issuing an algorithmic stablecoin — can potentially set into motion or contribute to a “boom” or “bust” of the cryptocurrency ma...
Is it Bitcoin’s time to shine? British pound drops to all-time low against the dollar
On Sept. 26, the British pound hit a record low against the U.S. dollar following the announcement of tax cuts and further debt increases to curb the impact of a possible economic recession. The volatility simply reflects investors’ doubts about the government’s capacity to withstand the growing costs of living across the region. The U.S. dollar has been the clear winner as investors seek shelter in the largest global economy, but the British pound’s weakness could be a net positive for Bitcoin. The GBP, or British pound, is the world’s oldest currency still in use and it has been in continuous use since its inception. Fiat currencies are a 52-year old experiment The British pound, as we currently know, started its journey in 1971 after its convertibility with gold ...
Jerome Powell is prolonging our economic agony
Can we all agree that the Federal Reserve has a plan to combat runaway inflation? They do. Chair Jerome Powell has all but admitted it. After tempering his comments before previous rate hikes, allowing wiggle room which gave way to market rebounds, Powell has left no bones about this one. It is necessary to wreak some havoc on the economy and put downward pressure on the labor markets and wage increases to stop the creep of inflation. Whether you buy into that logic or if you believe — like Elon Musk — that such movements could result in deflation — doesn’t matter. All that matters is what those voting on the rate hikes believe, and there’s plenty of evidence that they won’t stop until the rate is over 4%. Wednesday’s rate increase of 75 basis points only moves us in that direction. This i...
Long the Bitcoin bottom, or watch and wait? Bitcoin traders plan their next move
Bitcoin (BTC) faced a 9% correction in the early hours of Sept. 19 as the price traded down to $18,270. Even though the price quickly bounced back above $19,000, this level was the lowest price seen in three months. However, pro traders held their ground and were not inclined to take the loss, as measured by derivatives contracts. Bitcoin/USD price index, 2-hour. Source: TradingView Pinpointing the rationale behind the crash is extremely difficult, but some say United States President Joe Biden’s interview on CBS “60 Minutes” raised concerns about global warfare. When responding to whether U.S. forces would defend Taiwan in the event of a China-led invasion, Biden replied: “Yes, if in fact, there was an unprecedented attack.” Others cite China’s central ...
Goldman Sachs’ bearish macro outlook puts Bitcoin at risk of crashing to $12K
A sequence of macro warnings coming out of the Goldman Sachs camp puts Bitcoin (BTC) at a risk of crashing to $12,000. Bitcoin in “bottom phase?” A team of Goldman Sachs economists led by Jan Hatzius raised their prediction for the speed of Federal Reserve benchmark rate hikes. They noted that the U.S. central bank would increase rates by 0.75% in September and 0.5% in November, up from their previous forecast of 0.5% and 0.25%, respectively. Fed’s rate-hike path has played a key role in determining Bitcoin’s price trends in 2022. The period of higher lending rates — from near zero to the 2.25-2.5% range now — has prompted investors to rotate out of riskier assets and seek shelter in safer alternatives like cash. Bitcoin has dropped by almost 60% year-to-date and is...
Global inflation mounts: How stablecoins are helping protect savings
Economies around the world are facing a motley of challenges caused by rising inflation. High inflation devalues national currencies, which, in turn, pushes up the cost of living, especially in scenarios where earnings remain unchanged. In the United States, the government has responded aggressivelyto inflation. The nation hit a 9.1% inflation rate in June, prompting the Federal Reserve to implement a series of fiscal countermeasures designed to prevent the economy from overheating. Hiking interest rates was one of them. Soaring Fed interest rates have consequently slowed down consumer spending and business growth in the country. The counter-inflation approach has also strengthened the value of the U.S. dollar against other currencies due to tight dollar liquidity checks. As 79.5% of all i...
Bitcoin margin long-to-short ratio at Bitfinex reach the highest level ever
Sept. 12 will leave a mark that will probably stick for quite a while. Traders at Bitfinex exchange vastly reduced their leveraged bearish Bitcoin (BTC) bets and the absence of demand for shorts could have been caused by the expectation of cool inflation data. Bears may have lacked confidence, but August’s U.S. Consumer Price Index (CPI) came in higher than market expectations and they appear to be on the right side. The inflation index, which tracks a broad basket of goods and services, increased 8.3% over the previous year. More importantly, the energy prices component fell 5% in the same period but it was more than offset by increases in food and shelter costs. Soon after the worse-than-expected macroeconomic data was released, U.S. equity indices took a downturn, with the tech-he...
Bitcoin price sheds $1K in 3 minutes as US CPI inflation overshoots
Bitcoin (BTC) crashed below $22,000 instantly on Sep. 13 after United States inflation data failed to meet estimates. BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView CPI print sparks major crypto rout Data from Cointelegraph Markets Pro and TradingView showed BTC/USD swiftly falling $1,000 after Consumer Price Index (CPI) inflation for August came in at 8.3% year-on-year. Consensus had agreed that 8.1% would be the latest figure, and the overshoot suggested that inflation was not slowing at the expected pace. US CPI for August YoY coming in above expectations at 8.3% (expected 8.1%) but lower than in July with 8.5%. MoM core CPI coming in hot at 0.6% twice as high as the expected 0.3%. Not what the Fed wants to see. So 75bps it is at the next meeting? — Jan Wüstenfel...
Elon Musk, Cathie Wood sound ‘deflation’ alarm — Is Bitcoin at risk of falling below $14K?
Bitcoin (BTC) has rebounded by 20% to almost $22,500 since Sept. 7. But bull trap risks abound in the long run as Elon Musk and Cathie Wood sound an alarm over a potential deflation crisis. Cathie Wood: “Deflation in the pipeline” The Tesla CEO tweeted over the weekend that a major Federal Reserve interest rate hike could increase the possibility of deflation. In other words, Musk suggests that the demand for goods and services will fall in the United States against rising unemployment. A major Fed rate hike risks deflation — Elon Musk (@elonmusk) September 9, 2022 Typically, rate hikes have been bad for Bitcoin this year. In context, the period of the Fed raising its benchmark rates from near zero in March 2022 to 2.25%–2.50% in August 2022 has coincided wi...
Bitcoin short squeeze ‘not over’ as BTC price eyes 17% weekly gains
Bitcoin (BTC) stayed higher into the Sep. 10 weekly close as optimistic forecasts favored $23,000 next. BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView $23,000 targets remain in place Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting $21,730 on Bitstamp overnight — the most since Aug. 26. The pair managed to conserve its prior gains despite low-volume weekend trading conditions being apt to amplify any weakness. Among analysts, excitement was palpable going into the new week, one which should prove pivotal for short-term crypto price action. The Ethereum (ETH) Merge and fresh United States inflation data were the top catalysts expected to influence the market. “Expect volatility to pick up around next week’s economic data,” on-chain monitoring res...
