The unexpectedly strong US Consumer Price Index report published on April 10 has caused ripples of surprise in financial markets. Crypto assets like Bitcoin, along with most others, have dropped in value, adding to the downturn experienced on April 9. This news is a blow for optimists in the market.
United States CPI Data Came In Hot
Based on Trading Economics information, the Consumer Price Index (CPI), which measures inflation, increased by 0.4% in March. This brought the overall inflation rate for the year up to 3.5%. Surprisingly, this figure exceeded economists’ expectations and thwarted anticipations of significant interest rate reductions from the Federal Reserve in 2023.
Despite the anxiety in the financial markets, Matt Hougan, Bitwise Asset Management’s CIO, presented an opposing viewpoint as fear spread through Bitcoin and crypto markets. In a recent post on X, Hougan argued that the Consumer Price Index (CPI) data had minimal impact on Bitcoin’s future direction.
According to the executive’s perspective, it is essential for investors and traders to pay attention to various market elements beyond Bitcoin exchange-traded funds (ETFs) inflows and expanding government deficits. In Hougan’s opinion, these factors can significantly impact Bitcoin’s price, potentially causing an uptick since they currently coincide.
Despite the recent decrease in Bitcoin’s value, some believers see this as a chance for long-term investors to buy. They argue that the latest “scorching” Consumer Price Index (CPI) data highlights the weaknesses of traditional currencies. Consequently, investors might be drawn to Bitcoin as a protective measure.
Additionally, there’s strong interest in gold due to its reputation as a safe investment among financial professionals, and this optimistic view is supported by robust demand. Experts believe Bitcoin may mimic this trend as people look for ways to preserve wealth during periods of increasing inflation.
Supporting the optimistic view, there’s a strong chance that a Bitcoin Spot ETF will be introduced in Hong Kong by the end of April, adding to the positivity.
The Hong Kong Securities and Futures Commission (SFC) is reviewing several applications, including those from prominent Chinese asset managers. If given the green light, this could result in increased investment in Bitcoin, attracting additional funds from the US market.
In simpler terms, the value of Bitcoin (BTC) remains relatively stable while facing resistance. The downturn on April 9 has been validated, and there’s a risk it could drop further if the bulls can’t push the price above its record high of approximately $74,000.
Bitcoins trend continues to point upwards, following a bullish pattern within an ascending triangle. This optimistic view could change if the price falls below the $61,500 mark in upcoming trading sessions.
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2024-04-11 07:49