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The crypto market and Bitcoin trend of the past few days was completely unexpected. The market is feeling the heat of the bears as most crypto assets moved south. In addition, the FTX crisis has increasingly brought another contagious negative achievement into the space.
Bitcoin had a complicated swing as the token fell from its critical level of $20K. The price of BTC has fallen to around $16K. The whole situation and the development of events is causing more fear and doubt among most of the participants in the crypto industry.
However, the primary crypto asset has shown signs of rebound for several minutes into today’s trading hours. The US Bureau of Labor Statistics just released the latest inflation report in the country. Unfortunately, the data for the consumer price index for October is out.
CPI Data Exceeds Expectations, Bitcoin Remains in Recovery Mode
According to the data, the CPI for October stands at 7.7%, indicating a 0.4% increase due to the seasonal adjustment. This latest report turns out to be better than expected. Therefore, Bitcoin reacted positively within minutes of the news being announced.
With the current flow in the general economy, most expectations for the CPI report were around 8%. But the reality of value has brought a positive change to the crypto market.
According to data, the price of BTC suddenly surged to $17,800 before falling again. The token is currently trading between $17,278 and $17,400.
Compared to the September CPI data of 8.2%, this latest CPI report proves excellent news. Core CPI data rose 0.3% in October excluding food and energy. This trend is slower than the expected 0.5%, down from 0.6% in September.
The annual comparison shows that core CPI rose 6.3% in October, below the projected increase of 6.5% and fell from 6.6% in September.
Implications of CPI Reports
The CPI reports are one of the measures the US Federal Reserve uses to determine inflation in the country. That’s why this October’s data is an essential report for the Fed for the usual Federal Open Market Committee (FMOC).
The next and final FOMC meeting of the year is scheduled for December 14-15. The FOMC is likely to raise its benchmark for the Fed Funds rate again during the meeting. If it happens, it will be the seventh such rate increase in 2022.
The Fed has taken an aggressive stance in controlling inflation. It has raised interest rates by 75 basis points in several months as a result of higher CPI data.
The crypto market shows a correlation with macroeconomic factors. So, reports on CPI data usually affect the prices of crypto assets, as just happened. Also, excellent CPI data has fueled a spike in equity futures as they expect the Fed’s tightening measures to ease.
featured Image From Pixabay, Charts From Tradingview.com