Major coins rallied on Wednesday after July consumer price index data indicated a slowdown in inflation. The global cryptocurrency market cap rose 3.9% to $1.1 trillion at press time.
|Cryptocurrency||24-Hour % Change (+/-)||Price|
|Lido DAO (LDO)||+18%||$2.68|
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Why It Matters: Among the major coins, Ethereum led in gains — rising nearly 9% intraday, compared with Bitcoin’s 4% gains.
Risk assets shot up as data from the U.S. Labor Department indicated that headline CPI rose 8.5% in July compared with 9.1% in June. The number was below economist estimates of an 8.7% rise. At press time, the S&P 500 and Nasdaq futures rose 0.2% and 0.3%, respectively.
“Wall Street is now anticipating a Fed pivot in September as pricing reflects a half-point increase. If inflation continues to drop, the bull-steepening trade will gain further momentum,” said Edward Moya, a senior market analyst with OANDA.
“Bitcoin might rally significantly if this broad risk-on rally continues. The majority of the crypto space is still skeptical of the Bitcoin rebound that started in mid-June, but momentum traders may pounce on this opportunity if Bitcoin rallies above the $25,000 level. A Bitcoin breakout could target the $28,400 level initially,” said Moya, in a note seen by Benzinga.
Cryptocurrency trader Michaël van de Poppe tweeted that the apex coin rejected resistance and expects some consolidation between the $23,200 and $23,400 levels to sustain support. He expects the trend to target the $27,000 to $28,000 levels.
#Bitcoin rejecting at resistance again, as we’ve seen a positive reaction from a lower CPI than expected.
I’m seeing some consolidation here, looking at regions around $23.2-23.4K to sustain support.
If so, trend can continue targeting the $27-28K levels. pic.twitter.com/Ar7KskqvtY
— Michaël van de Poppe (@CryptoMichNL) August 10, 2022
The lower inflation number will “bode well” for cryptocurrencies, while the dollar index, a measure of the greenback’s strength against a basket of six other currencies, was down immediately to channel support, noted trader Justin Bennett on Twitter. At press time, the dollar index was 0.05% higher at 105.25.
CPI YoY: 8.5%
— Justin Bennett (@JustinBennettFX) August 10, 2022
The ratio of Tether (USDT) on exchanges has risen from 19.7% in early May to 42% over three months. This can be an indicator that traders took profit as prices of cryptocurrencies rose or a “sign of a 2-year high in buying power, tweeted Santiment, an on-chain and social analysis platform.
The ratio of #Tether on exchanges has gone from 19.7% on May 9th to a whopping 42.0% three months later. This can be viewed as both a signal that traders have taken profits as prices have rebounded, as well as a sign of a 2-year high in buying power. https://t.co/Xmscnu5NOb pic.twitter.com/UFuYAkrWlO
— Santiment (@santimentfeed) August 10, 2022