Inflation and risk on assets do not go very well. The prices of assets take a hit, making it difficult for them to rally during times of high inflation. So, as soon as the United States announced that inflation had reduced to 8.5%, Bitcoin pumped nearly 5%, reaching $24,000. It consolidated for a while at that level and fell to $23,500 before jumping back. And now that Bitcoin breaches $24k, we are seeing altcoins and Ethereum rally as well.
Bitcoin, inflation, interest rate hikes
It is now clear that the market is bullish because of lower inflation numbers. This also explains why there was a price jump when the feds announced a 75 basis point rate hike just a while back. This time the expected inflation rate was 8.7%, but the actual number was even lower than that at 8.5%. In July, the same rate was at 9.1%, which explains the bullish sentiment of the market.
Bitcoin’s price action
Now that Bitcoin is trading at $24,400, it is good to be bullish, but there is going to be even more volatility in the market. Almost 10 days back, Bitcoin tried to cross this level, but the price got rejected, and it fell back to $22.5k. So, the $24,600-$25,000 level would be very important for this rally to continue.
On the daily chart, we don’t see much resistance from MA and EMA in the near term. However, in the weekly chart, we have the EMA 200 near $26,500 and EMA 20 at $28,000. It will be important for Bitcoin to clear these levels.
Ethereum and alts
ETH has been showing strong price action as the market becomes bullish and its merger nears. It even breached the $1,900 price point and is now trading just below that level. If the rally continues for a while, we could see ETH break the $2,000 price point once again. It will not be easy, though, as the MA 20 and EMA 20 is waiting for ETH at $1,920 and $2,000 on the weekly charts. The price has already retraced back once from MA 20.
Altcoins are also doing well and are mostly up 5-10% in the last 24 hours. If Bitcoin crosses $25k, we can expect altcoins to rally really well.
What are your thoughts as Bitcoin breaches $24k after US inflation data releases? And do you think this rally will continue? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Crypto bank Nuri files for insolvency: user funds are safe.
