Bitcoin (Bitcoin) Prices stabilized on Tuesday after closing 3.41% in the previous trading day, supported by weaker sentiment in the U.S. dollar before the key inflation report will be released later today.
The spot BTC/USD exchange rate rose slightly by 1.31% to 33,096 U.S. dollars After bottoming out on Monday The Coinbase exchange price is $32,996. CME Bitcoin futures rose 1.64% from the previous trading day’s low of $32,600.
At the same time, the US dollar index fell about 0.03% before the London market opened. The index represents the strength of the U.S. dollar against a basket of major foreign currencies.
Waiting for inflation data
In the week of the key inflation report and important congressional testimony from Federal Reserve Chairman Jerome Powell, Bitcoin and the U.S. dollar moved in opposite directions.
On Tuesday, the US Consumer Price Index (CPI) Expect another significant peak June highlighted the rise in inflation as the economy tried to recover from the slowdown of the coronavirus pandemic.Reuters survey of economists famous The CPI may rise 0.5% from May and 4.9% from the same period last year.
Many traders are betting on the prospect of rising inflation with Bitcoin, partly because the popular saying predicts the flagship cryptocurrency as a central bank’s inflation policy that is a hedge against the purchasing power of fiat currencies.
Inflation is killing your savings account.
Power supply. #Bitcoin
-David Gokhshtein (@davidgokhshtein) July 11, 2021
Specifically, the Federal Reserve has been implementing a monthly asset purchase plan of US$120 billion since March 2020, while keeping the benchmark lending rate close to zero. As a result, the policy of the U.S. Central Bank doubled its balance sheet size to over US$8 trillion. At the same time, Bitcoin surged by 1,528% during the same period-from $3,858 to nearly $65,000.
By the aforementioned peak in mid-April, the cryptocurrency had fallen by more than half, but maintained its overall bullish bias by persistently setting $30,000 as its lower psychological price limit. This support is very convenient after the first two CPI reports showed that inflation jumped to 4.2% in April and 4.9% in May.
Gustavo De La Torre, Director of Business Development at N.exchange, said: “The rise in the CPI reading indicates that the economy has not fully recovered from the pandemic pain, and the cryptocurrency market is lagging behind negative inflation data. “Tell Cointelegraph. He added that lower Bitcoin prices combined with mixed economic prospects will prompt more investors to increase their holdings of cryptocurrencies.
“If acquisitions intensify, we may see Bitcoin prices rise to $40,000 in the short term,” De La Torre added.
In addition, Konstantin Anissimov of CEX.IO issued a warning about the possible tough response of the Fed to further increases in inflation, and pointed out that this may prompt the central bank to withdraw from the bond purchase program early and cut interest rates.
“As far as the current situation is concerned, the Fed has increased its balance sheet size from the beginning of 2020 to more than 8 trillion US dollars-this is a substantial increase,” Anisimov said, adding that lower crypto prices will Continue to be the correct hedging tool to hedge against inflation concerns for the time being. He further pointed out:
“The repurchased Bitcoin and Ethereum may retest the new price levels, respectively, at $45,000 and $3,000.”
Bitcoin enters accumulation
The indicators on the chain continue to point to the continued accumulation of Bitcoin.According to Glassnode’s data, as of last week’s close, there are almost no entities with a history of selling Continue to pile up Bitcoin from weaker hands, And the net transaction flow turned negative, indicating that traders have been withdrawing their bitcoins from the trading platform to hold them.
“The retail industry has been buying in large quantities for several weeks, but we finally waited for the increase in the number of whales we were expecting,” famous Will Clemente, independent market analyst.
“17 new whales were born on the blockchain this week, and the total holdings of whales increased by 65,429 BTC.”
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