Bitcoin Sees CPI Volatility As Lower Inflation Sends BTC Price To $18K
Bitcoin (BTC) hit new one-month highs on December 13 as US inflation data sent a wave of optimism through the markets.
BTC price rebounds in US inflation slows
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting $18,105 on Bitstamp after November’s Consumer Price Index (CPI) came in below expectations.
The reading, called the “most important” of the year, even beat analysts’ expectations that inflation is slowing.
CPI for November was 7.1% on an annual basis, compared to the forecast of 7.3%. Month-on-month was 0.1% against the expected 0.3%.
“The All Items Index increased by 7.1 percent for the 12 months ending November; this was the smallest 12-month increase since the period ending December 2021,” an accompanying press release confirmed.
Bitcoin traders and analysts were unsurprisingly encouraged by the injection of positivity that resulted.
“Massive short squeeze heading into market,” popular analysis resource Game of Trades black in part of a tweet before Wall Street opened.
One more conservatives the reaction came from Il Capo of Crypto, who told followers that he was still not planning BTC exposure despite the gains.
“CPI better than expected but still very high,” he said.
“Price tests a massive resistance zone here and forms a lower high. I’m still 100% out of the market.”
Equally cautious was Fejau, an analyst at crypto research firm Reflexivity Research, who warned of “deflationary panic” that is not coming.
“We are now entering the complacent Goldilocks phase of inflation,” he announced.
“Cpi coming down faster than expected is bullish until it turns into a deflationary panic in Q1 2023. Final low around then bullish into 2024. Enjoy long rallies but don’t miss the forest for the trees.”
Like Cointelegraph reportedthe week is set to contain more than just CPI numbers, with the US central bank set to decide on December’s interest rate hike and chairman Jerome Powell to speak on 15 December.
According to CME Group’s FedWatch Tool, consensus was for a lower 50 basis point hike on the day, with the odds at just under 80% versus 75% at the start of the week.
The Binance fear is already disappearing
BTC/USD, meanwhile, had performed well even before the CPI release, showing no signs of getting cold feet in the face of fresh panic over events involving the biggest crypto exchange Binance.
Related: SBF ‘didn’t like’ decentralized Bitcoin — ARK Invest CEO Cathie Wood
Called “FUD” by CEO Changpeng Zhao, concerns that surfaced in Reuters and on social media nevertheless triggered an exodus of user funds, totaling over $500 million in BTC alone over 24 hours
In other events related to the FTX debacle, the exchange’s former CEO, Sam Bankman-Fried, was arrested in the Bahamas on the day, while the US Securities and Exchange Commission charged him with defrauding FTX users.
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