Bitcoin
Other cryptocurrencies rose on Wednesday, with the largest digital asset hitting a two-year high, bucking pressure on stocks as U.S. inflation data rattled investors’ expectations for interest rate cuts.
Bitcoin price has risen 3% in the past 24 hours to more than $51,300 and was previously trading around $51,700, which is a few steps from the major cryptocurrency’s all-time high of $69,000. It was the highest price since December 2021, which was a week ago. Bitcoin breached the milestone $50,000 level earlier this week, but Tuesday’s release of the U.S. Consumer Price Index (CPI) boosted investor confidence in the prospects for the Federal Reserve to cut interest rates in the coming months. The party initially did not last long due to wavering. .
“Just as Bitcoin was able to climb above $50,000 for the first time since 2021, the rug was pulled out from under it by a dire inflation report in the US. While damaging in the short term, it did not significantly dampen the mood of the crypto industry. I don’t think it’s going to weaken,” said Craig Erlam, an analyst at broker Oanda.
In fact, crypto traders are shaking off the CPI print.
Dow Jones Industrial Average
The worst day in almost a year,
S&P500
Bitcoin fell back to its highest level in more than two years on Wednesday. The CPI’s announcement showed that inflation was higher than expected in January, putting a damper on expectations that the Fed will cut interest rates from a generational peak as early as March in response to slower inflation. It was showered on me.
While the inflation outlook remains important for cryptocurrencies that, like other risk assets, are sensitive to borrowing costs, the overall price trend for the token is positive as traders seize on multiple positive catalysts and a strong technical market backdrop. Bitcoin appears to have strong momentum, but the price could come under pressure in the short term if traders start taking profits.
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“This is the upper bound for consolidation in December 2021.” Alex Kupczykevich, an analyst at the broker FxPro, said that Bitcoin is likely to be shaken out in this space, as it was in September and December 2021. “However, we believe this is part of a strong bullish wave that could resume growth very quickly.”
Beyond Bitcoin
ether
The second-largest cryptocurrency rose 3% to $2,750. Smaller tokens were also green.
cardano
4% increase;
polygon
2% increase. Meme coins were quieter.
dogecoin
and
Shiba Inu
Each is an increase of less than 1%.
Email Jack Denton at jack.denton@barrons.com.
