THE cryptocurrency market has been very volatile in recent weeks, Bitcoin and Ethereum have seen significant price fluctuations. Traders and investors are closely watching the impact of macro data on digital asset prices. Today, all eyes are on the US Consumer Price Index (CPI) and retail sales figures, which should provide insight into the strength of the US economy and inflationary pressures.
Cryptocurrency Market Fundamental Outlook
Bitcoin and Ethereum have seen significant gains in recent weeks, BTC hitting an all-time high over the past nine months over $25,000 and ETH crossing a critical resistance level at $1,700. However, the reason for their upward rally could be attributed to the slightly encouraging inflation data released earlier and the continued recovery of the financial sector from the series disasters.
The latest statistics show that consumer inflation in the United States has come down, but remains at elevated levels. VSThis could encourage the Federal Reserve to maintain its aggressive rate stance. If macroeconomic factors continue to be favourable, Bitcoin may soon have the potential to hit the $30,000 mark.
Despite taking profits on some of its early gains, Bitcoin still remains 80% above its low point. Currently, Bitcoin and ETH are trading at $24,850 and $1,700 respectively.. These bullish market moves suggest that the digital currency market is experiencing positive sentiment.
Moreover, the rise in Bitcoin prices accelerated further after the British government expressed its support for Silicon Valley Bank. This news sparked favorable sentiment among investors, leading to an increase in buying activity.
The rise in the value of BTC reflects positive sentiment towards the digital currency industry. As such, investors should monitor market developments closely before making any major investment decisions.
Impact of the consumer price index (CPI) on the price of Bitcoin
The recent release of February 2023 Consumer Price Index (CPI) statistics by the US Department of Labor has had a huge impact on Bitcoin prices.
The CPI measures the average change in consumer prices of a basket of goods and servicesand it rose 0.4% on a seasonally adjusted basis last month.
However, the headline inflation index increased by 6% compared to the previous yearwhich raised concerns among investors.
Although the release of CPI data caused turbulence in traditional markets, cryptocurrency markets reacted positively, with Bitcoin and Ethereum seeing price increases. This indicates that investors are turning to digital assets as a potential hedge against inflation.
It should be noted that the CPI is a crucial tool for assessing economic performance, determining monetary policy, and adjusting wages, benefits, and Social Security payments. Therefore, rising inflation could prompt the Federal Reserve to take a more aggressive stance.
Therefore, thehe traditional financial markets could be negatively affected if the Fed decides to raise interest rates in response to rising inflation. Conversely, it may encourage more people to invest in Bitcoin and other cryptocurrencies as an alternative investment choice to combat capital erosion due to inflation.
While rising inflation is undoubtedly concerning, it is unclear how it will affect the global economy in the long term. Nevertheless, the rise in Bitcoin prices after the release of CPI statistics suggests that digital assets are gaining acceptance as a viable hedge against near-term inflation.
Predictions for the US Retail Sales Report in February and its Potential Impact on Bitcoin Prices
The US Census Bureau should release the February retail sales report on March 15. Economists and researchers from eight major banks provided their predictions for the upcoming data.
US expects retail sales to drop 0.3% year-over-year, down significantly from January’s 3.0% growth. However, excluding autos, sales are expected to rise 0.2% year-on-year, from 2.3% in January. Additionally, the control group, used for GDP calculations, is expected to fall 1.2% from a 1.7% increase in January.
It should be noted that retail sales data is a crucial indicator of the health of the US economy, as consumer spending contributes a large share to GDP. Therefore, the expected decline in retail sales could indicate a slowdown in the US economy, which could have a negative impact on traditional financial markets. Nevertheless, cryptocurrencies like Bitcoin are likely to benefitas investors may seek alternative assets during times of economic uncertainty.
As a result, the impact of retail data on BTC prices will depend on how investors interpret the news. A bigger-than-expected drop in retail sales could boost BTC prices as investors seek safe-haven assets.
Conversely, better-than-expected sales numbers could push BTC prices down as investors shift their focus back to traditional assets. Overall, the upcoming release of retail sales data is expected to have a significant impact on financial markets and could influence the price of BTC in the near term.
The value of bitcoin
At the $24,850 level On Wednesday, the BTC/USD pair showed a bullish trend. Bitcoin may encounter immediate resistance at the $25,250 level on the upside. If this level is exceeded, there could be more buying opportunities, with a potential move towards a price action of $26,700.
However, if Bitcoin’s immediate support level at $24,000 is breached on the downside, it could lead to additional selling pressure, potentially lowering the price of BTC to the $23,750 level. Traders may therefore consider a buy trade if the price breaks above $25,225 today.
The price of Ethereum
The current value of Ethereum is $1,700and it is currently facing strong resistance near the $1,710 level, with the double top pattern extending this resistance. A break above this level could expose ETH price towards the $1,800 mark.
Below that, Ethereum’s immediate support is $1,600 or $1,495. Investors will be watching US CPI and retail sales data closely today to determine the impact of this data on ETH, but a significant pullback is unlikely.
Top 10 Alternatives to Bitcoin and Ethereum to Watch
Cryptonews Reviewed top 10 cryptocurrencies for 2023. If you are looking for a higher potential investment opportunity, there are many other projects worth considering.
Disclaimer: This linked article presents the views of crypto industry players and is not part of the editorial content of Cryptonews.com.
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