Data from Cointelegraph Markets Pro and TradingView confirmed hourly gains of around $1,000 after US Consumer Price Index (CPI) data for July showed a slowdown versus the previous month.
While managing $24179 on Bitstamp, BTC/USD did not attract enough momentum to challenge levels from the previous day.
However, relief among traders was palpable, as lower inflation for the Federal Reserve should signal the need for less sharp interest rate hikes going forward. This, in turn, should reduce pressure on risky assets, including cryptocurrencies.
Year-on-year CPI inflation came in at 8.5%, below expectations of 0.2%, while the month-over-month figure was unchanged from June.
Raul Pal, founder of Global Macro Investor, responded, “Markets now have a very clear path up to the regional Fed surveys in a matter of weeks or so. I expect it to be much weaker.”
“Peak inflation is giving way to concerns about peak growth. I think markets will react positively to weak growth, not negatively overall.”
Blockware’s principal analyst, William Clemente, was more cautious, describing the rise in risky assets as continuing “short-term” on the back of the print.
Meanwhile, faith in the Fed’s cooling of the rate hike cycle began almost immediately, with bets on a 75 basis point rate hike in September sharply lowered in favor of 50 basis points.
“July’s CPI is optimistic, especially for technology stocks,” added market commentator Holger Schpitz.
The dollar is falling step by step as Ethereum outperforms its best performer for several months
Ether (ETH) celebrated the CPI event more than Bitcoin, which took advantage of the mood to post its highest levels since June 7.
Related: Bitcoin Dominance Reaches 6-Month Low as Barometer Announces New ‘Alternate Season’
At $1,847, ETH/USD is up 11.5% on the day, fueling hopes that the crypto rally could be more than a fake scam.
Trader and commentator Josh Rager tweeted: “Some of you forget that the market can be pumping and it’s actually not a trap. Especially if it’s primarily driven.”
ETH/USD (Binance) 1 day candle chart. Source: TradingView
However, the obvious loser today was the US dollar, which extended its downtrend in place since mid-July on the CPI.
The US Dollar Index (DXY) lost 1.3% and is now targeting its 100-day moving average, according to popular trader Pierre.
Sven Heinrich, founder of the analytics firm NorthmanTrader, described DXY as “shattered”.