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The vast majority of retail client accounts lose money when trading CFDs.
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Important Notice - Scam alert
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
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Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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Bitcoin prices jump above $24K as US inflation cools down

The crypto market witnessed a strong bounce yesterday. Bitcoin (BTCUSD) prices led the way and jumped above $24k after the US inflation report cooled to 8.5% YoY. The CPI report released yesterday showed that the US inflation rate has finally peaked.

 

Investors have more confidence to jump back into cryptocurrency, expecting the Fed to slow down in the aggressive interest rate hike during their next session in September.

Global inflation seems to be giving way gradually as many believe that inflation has peaked after hitting an all-time high across various countries in June.

The high oil prices, which have fuelled global inflation, have finally settled below $90 per barrel. Oil prices remaining below $100 all through July have been the primary catalyst that ensured the slowdown in the inflation rate.

During their previous session, the Fed pledged its commitment to continue hiking the interest rate until they saw a sign that the menace of inflation had given way to a healthy economy. The CPI reading released yesterday proves that the Fed's target is gradually becoming a reality, which will likely cause them to slow down in hiking the interest.

Hitherto, Bitcoin has been held below $30k for the more significant part of 2022 due to the series of aggressive interest rate hikes embarked upon by the Fed.

Cryptocurrency investors are steering away from risky assets, reinvesting in the US dollar as hedging. This has strengthened the dollar index for the more significant part of the first and second quarters of 2022.

The Fed had raised the interest rate to the range of 2.25% -2.5% after embarking on the fourth aggressive interest rate hike for the US dollar in July. The committee will look at the available data during its next session to determine the rate for the next interest rate hike during the next session on September 20th - 21st.

Hence, the decline in the inflation rate has become a positive sign for investors that the Fed will likely slow down in its pace of interest rate hikes during their next session.

Bitcoin is currently on a relief bounce after a long fear of further crashes should the Fed embark on a different interest rate hike due to rising inflation. Well, the story changed yesterday, and investors and investors jumped in as they await a dovish response from the Fed in return.

Another important factor that seems to be driving up the price of Bitcoin and altcoins is the fact that the Fed will be having its annual retreat in August. This means there will be no news of interest rate hiking during a month.

Analysts tend to consider the current month a bullish relief bounce for Bitcoin and altcoins. Many experts have predicted that Bitcoin will likely break above the present resistance at $24k to reclaim the $30k level again. Is this forecast realisable?

Not all crypto traders and analysts have welcomed this view. Many experts still believe Bitcoin will remain below $30K until the rate stabilises.

The next Fed session in September will be crucial to determine if Bitcoin will break above the $30K psychological resistance, which has been the level from which it crashed this year.

Will the bullish trend for Bitcoin continue?

Bitcoin and other Cryptocurrencies are currently bullish. Analysts believe that Bitcoin has created a bottom at $18K and is back on its path toward recovery. Yet many still hope to retest the support level at $20K to allow more investors to come in. While these views are understandable, Bullish's overriding sentiment toward Bitcoin at the moment. Many believe the bullish trend for Bitcoin will likely last throughout the current month to print new highs again.

Notwithstanding, Bitcoin needs to break the resistance at $24,600 to trigger more buys. Once this resistance is, the next target for Bitcoin will be $27,400.

On the contrary, should Bitcoin fail to break above the current resistance mentioned above, we can expect a retest of the lower support level at $20K.

Is Bitcoin a Safe investment?

Bitcoin is today the most valuable cryptocurrency in the world, with the most significant capital investment. Investors consider Bitcoin the first crypto investment package to come before others. The fact that Bitcoin has survived attacks from its creation until now has attracted more investors to it.

Hence, many investors would consider Bitcoin a lucrative investment package. All cryptocurrency investment risks and Bitcoin is no exception to this. All investors need to understand the risks before venturing into any cryptocurrency investment.

Last Updated: 11/08/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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