As a seasoned analyst with over two decades of experience in global financial markets, I find myself intrigued by the current state of Bitcoin and its correlation with macroeconomic indicators, such as the US Consumer Price Index (CPI) and the Federal Reserve’s monetary policy decisions.
Crypto traders are keeping a close eye on the upcoming US Consumer Price Index (CPI) release set for Wednesday, as the current Bitcoin price is holding steady at around $56,700 before any potential further movement. A crypto analyst suggests that if the US inflation data comes in lower than expected, it could boost sentiment among Bitcoin traders ahead of next week’s anticipated Fed rate cut. Should the Bitcoin price rise to $60,000 levels, an estimated $1.6 billion in short positions may be liquidated according to CoinGlass data.
As a researcher, I recently expressed that short sellers may find themselves in a precarious position, potentially facing a sharp rally triggered by a classic short squeeze. In an interview with Cointelegraph, I also noted that investor confidence continues to thrive, and I’m skeptical about the possibility of the annual Consumer Price Index (CPI) delivering an unexpected upward surprise, given its calculation methodology.
As a researcher, I’m anticipating that if the August Consumer Price Index (CPI) figures fall below projections, there’s a strong likelihood that many investors will begin to predict a more substantial interest rate reduction in the upcoming week. In fact, current estimates suggest that the Federal Reserve is highly likely to implement a 25 basis points (bps) rate cut, with a quarter of experts also speculating a 50 bps rate cut.
On September 4th, Federal Reserve Chair Jerome Powell reiterated this anticipation by saying “the moment is here”. This statement was made after the July Consumer Price Index (CPI) report indicated a 0.2% rise, following a 0.1% decrease in June, as reported by the US Bureau of Statistics.
Yet, Hundl added that unexpectedly high inflation might cause a significant Bitcoin sell-off. “If the extraordinary happens, then you’d anticipate intense selling of risky assets,” he explained.
Will the Yen Carry Trade Unwinding Hurt BTC Price Recovery?
Today, the Japanese Yen showed significant strength against the U.S. Dollar, pushing the JPY/USD rate up to 140.7 – its highest since the start of the year. This development has sparked worries about a potential repeat of the Yen carry trade unwinding, much like what occurred on August 5 last month.
The USDJPY pair is showing signs of decline, hinting at another turbulent phase in the financial markets as it nears the 140 mark. It will be interesting to observe how Bitcoin fares under these conditions.
— Arthur Hayes (@CryptoHayes) September 11, 2024
This situation could lead to additional selling of high-risk investments like stocks and Bitcoin, as suggested by BitMEX CEO Arthur Hayes’ hints about another potential unraveling of the Yen carry trade.
Read More
Sorry. No data so far.
2024-09-11 12:18