Surprisingly, the latest Consumer Price Index (CPI) report in the US revealed a meager 0.2% increase in inflation for June. This news comes as a relief to equity, gold, and silver investors, as it suggests a controlled rise in prices. However, the impact on the crypto market was minimal, despite the sudden spike in social volume surrounding the topic.
Renowned analytics firm Santiment took to Twitter to share this development, highlighting the positive implications for equities, gold, and silver owners. However, crypto-assets remained unaffected by the CPI report, raising eyebrows within the industry. Yet, there was a notable surge in discussions related to inflation on various crypto platforms.
Bitcoin’s Struggle To Break Resistance Level
On the other hand, Glassnode’s Co-founders, known as 𝗡𝗲𝗴𝗲𝗻𝘁𝗿𝗼𝗽𝗶𝗰, tweeted about Bitcoin’s recent struggles to break its resistance level. Bitcoin experienced immediate volatility following the release of the CPI data, with its price surging close to $31,000 before retracing back to its starting point. This erratic movement was likely influenced by buy-and-sell walls designed to curb volatility.
BTC Couldn't break the resistance level💥— 𝗡𝗲𝗴𝗲𝗻𝘁𝗿𝗼𝗽𝗶𝗰 (@Negentropic_) July 12, 2023
🔷Bitcoin reacted with immediate volatility to the CPI data release, nearly reaching $31k before returning to its starting point, as buy and sell walls were placed to prevent volatility.
🔶Seems like already priced in the macro updates… pic.twitter.com/skrlXPooFE
In his Swissblock insights report, 𝗡𝗲𝗴𝗲𝗻𝘁𝗿𝗼𝗽𝗶𝗰 that emphasized the significance of Bitcoin’s failure to surpass the resistance level. Prior to the CPI data release, the Bollinger Bands tightened to their narrowest since January, contributing to the sudden upward surge. However, strategic buy and sell walls were introduced to subdue the ensuing volatility.
Bitcoin’s lack of reaction on this particular day suggests that the market had already factored in the anticipated macroeconomic updates, resulting in the values aligning with expectations. Open interest remained relatively low, signifying a lack of major positioning leading up to the release.
The easing inflation rate of 3% in June, slightly lower than the predicted 3.1%, may prompt the US Federal Reserve to adopt a dovish monetary policy stance and pivot accordingly. Consequently, the US dollar index (DXY) plummeted to a two-month low of 101.16, while US yields also felt downward pressure. These factors, in turn, alleviated some pressure off Bitcoin.
Nevertheless, with a lower inflation rate signaling a robust economy, the overall macro environment appears favorable, providing Bitcoin and other altcoins with an opportune time to strengthen and ascend further.
Related Reading | Ethereum Staking Nears 20% Of Supply Amid Regulatory Hurdles