Bitcoin Gains Momentum Based on Positive CPI Numbers
After slipping to lows of $15.5K amid FTX’s liquidity crunch, Bitcoin (BTC) gained momentum due to better-than-expected consumer price index (CPI) numbers released by the U.S. Bureau of Labor Statistics.
Crypto and market education platform IncomeSharks tweeted:
“Bitcoin has an easy path back to $20k as Stocks pushing up and positive CPI numbers.”
Bitcoin was up by 3.78% in the last 24 hours to hit $17,281 during intraday trading, according to CoinMarketCap.
The CPI surge was lower than expected because it rose by 0.4% in October, the lowest since January 2022. The U.S. Bureau of Labor Statistics pointed out:
“The all items index increased 7.7 percent for the 12 months ending October, this was the smallest 12-month increase since the period ending January 2022. The all items less food and energy index rose 6.3 percent over the last 12 months … all of these increases were smaller than for the period ending September.”
The lower CPI numbers triggered a bullish reaction in the BTC market because this might mean that the Federal Reserve (Fed) will ease interest rate hikes, which have been detrimental to the crypto ecosystem.
The Fed has been increasing interest rates to the tune of 75 basis points (bps), and this is one of the primary factors hindering a significant leg up for cryptocurrencies.
Despite the positive CPI numbers, the crypto market is still not out of the woods yet as bears continue to bite. Market insight provider Material Indicators explained:
“CPI was lower, Jobless Claims were higher. FireCharts shows the crypto market’s initial reaction to a beat on the forecasted economic numbers. Bear Market Rally is still alive BTC.”
The collapse of FTX, one of the leading crypto exchanges, has also made the digital asset space shaky.
Reportedly, the liquidity issue facing FTX might have emanated from the exchange’s CEO, Sam Bankman-Fried, secretly transferring at least $4 billion to boost its trading arm Alameda Research, with part of the funds being customer deposits.
Image source: Shutterstock