Bitcoin (BTC) hit new one-month highs on Dec. 13 as United States inflation data sent a wave of optimism through markets.
BTC/USD 1 Hour Candlestick Chart (Bitstamp). Source: TradingView
BTC Price Rebounds in US Inflation Slows
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD hit $18,105 on Bitstamp after November consumer price index (CPI) print fell below expectations.
The data, dubbed the “most important” of the year, even beat analysts’ expectations for a slowdown in inflation.
November CPI came in at 7.1% y/y versus forecast of 7.3%. Month-on-month it was 0.1% versus 0.3% expected.
“The composite index rose 7.1 percent in the 12 months to November; this was the smallest 12-month increase since the period ended December 2021,” confirmed an accompanying press release.
Bitcoin traders and analysts were unsurprisingly buoyed by the ensuing positive sentiment.
“Massive short squeeze heading into market,” popular analytics resource Game of Trades replied in part of a tweet ahead of Wall Street’s open.
A more conservative reaction came from Crypto’s Il Capo, who told his followers that despite the gains, he still does not plan on any BTC exposure.
“CPI better than expected but still very high,” he said.
“Price is testing a massive resistance zone here and forming a lower high. I’m still 100% out of the market.”
Similarly cautious was Fejau, an analyst at crypto research firm Reflexivity Research, who warned of an imminent “deflationary panic.”
“We are now entering the smug Goldilocks phase of inflation,” he announced.
“Cpi falling faster than expected is bullish until turning into deflationary panic in Q1 2023. Final low around then and then bullish until 2024. Enjoy your long wins, but don’t miss the forest for the trees.”
As Cointelegraph reported, the week will feature more than just CPI numbers, with the Federal Reserve set to decide December’s rate hike and Chair Jerome Powell set to speak on December 15.
According to CME Group’s FedWatch tool, the consensus was for a lower 50 basis point hike on the day, with odds of just under 80% versus 75% earlier in the week.
Fed target rate probability chart. Source: CME Group
Binance fears are already fading
BTC/USD, meanwhile, was performing well ahead of the CPI release, showing no sign of cold feet amid renewed panic over events involving major crypto exchange Binance.
Related: SBF ‘didn’t like’ decentralized bitcoin – Cathie Wood, CEO of ARK Invest
Dubbed “FUD” by CEO Changpeng Zhao, concerns surfacing on Reuters and social media nonetheless sparked an exodus of user funds totaling over $500 million over 24 hours in BTC alone
In other events surrounding the FTX debacle, the exchange’s former CEO Sam Bankman-Fried was arrested in the Bahamas that day and accused by the U.S. Securities and Exchange Commission of defrauding FTX users.
The views, thoughts, and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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