BTC and ETH jumped in the minutes after the release of the consumer price index for July, which was lower than predicted. The market share of bitcoin and stablecoins continues to fall as traders appear to be more comfortable with exposure to riskier cryptocurrencies. At the time of writing, the Bitcoin price is changing hands at $23,971.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin price experienced about of volatility due to lighter-than-expected inflation data
Bitcoin (BTC) jumped 2% to about $23,500 in the minutes after the U.S. consumer-price inflation data for July was released. The most recent spike came after cooler-than-expected inflation data. The headline consumer price index (CPI) for the previous month increased by 8.5%, which is below analysts’ consensus estimate of 8.7%. The core CPI was unchanged with an increase of 5.9%, compared with the expected 6.1% growth.
Prior to that, it would come in hotter than expected over the course of 10 consecutive months. Month-over-month (MoM) inflation was 0%, which marks the biggest MoM decline in seven decades. Significant declines in gas prices and airfare were mainly responsible for the cooler-than-expected July CPI print. At the same time, grocery prices, electricity, and rent remain on the rise.
Ether (ETH) also rose 4% to $1,780 after the data was released. This might be a key support level for the cryptocurrency for a $2,000 target by the end of August.
While the most recent CPI data is a sign for the U.S. central bank, it is still unlikely to dramatically affect its current policy. This was a necessary print for the Federal Reserve, but inflation has to come down much more. Despite bouncing off recent lows, the largest cryptocurrencies remain deep in the bear market territory. Bitcoin and Ethereum are still down more than 60% from their respective peaks.