What’s the Current Situation of the Crypto Market Ahead of the U.S. CPI?
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After a massive bullish attack, the crypto markets are consolidating, losing over $170 million in just a few hours. The markets began to rise following Donald Trump elected to be the new president as he backed Bitcoin and the crypto space. Following his victory, the institutions also showered huge confidence in the crypto as they accumulated billions worth of BTC & ETH in just a few days. As a result, Bitcoin price bragged into the previous highs at $73,750 and maintained a steep ascending trend to mark new highs at $89,956.88.
Why crypto market is plunging? Have bears gained supremacy over the bulls?
The crypto markets eagerly wait for the CPI rates, FED chair Jeromy Powell’s speech, and a few more events that halt the bullish trajectory for a while. The U.S. CPI, which highlights the inflation of the country, is about to be announced in the next few days, which is believed to have a significant impact on the markets. The FED announced 25 bps rate cuts in the past week, which are expected to reduce the inflation, which has been sinking since June 2022. Therefore, there are many chances of the crypto markets revamping a strong rise as they both are negatively correlated.
Until then, the markets are expected to remain calm or probably face some bearish pressures as well as suggested by a popular analyst.
Analyst Micheal van de Poppe refers to the above chart and speculates a 10% correction towards the CME gap before the next continuation. Despite being slightly bearish on Bitcoin, he believes the markets are about to get started with the price reaching $90,000. However, a slight pullback at the highs is always healthy before the next leg up. Hence, a rebound can be expected following the release of fresh inflation rates.
On the other hand, the traditional asset Gold is facing massive bearish action, which raises the speculation of liquidity flowing into crypto markets, specifically Bitcoin. However, the crypto markets have just entered phase 2 of the bull run, where the second largest token, Ethereum, displays strength after the Bitcoin price rally in phase 1.
Once the ETH price manages to form a new ATH, which is likely this month, the capital rotates to other high-caps and later across the markets. Therefore, the crypto bull run is at the very initial stages, and hence the interim pullbacks are blessings in disguise as a strong rebound is imminent.