Markets
Cryptocurrency markets surge as inflation hits three-year low
Investors expect the Federal Reserve to cut interest rates by the end of the year.
Cryptocurrency markets rallied on Thursday after data showed that U.S. inflation fell to its lowest level in three years in June.
Second At the Labor Department, the Consumer Price Index (CPI) — which measures the cost of goods and services — fell 0.1% in June. That lowered the annual rate to 3%, the lowest since April 2021. Excluding food and energy prices, the core CPI rose 0.1% for the month and 3.3% on an annual basis.
According to the Bureau of Labor Statistics, these figures fell short of expectations: Dow Jones analysts had previously forecast a monthly increase of 0.2% and a year-on-year increase of 3.4%.
Falling inflation gives the Federal Reserve more room to potentially cut interest rates later in the year.
The data also comes after Jerome Powell, chairman of the Federal Reserve, mentioned potential rate cuts during his testimony to Congress on Tuesday. Powell warned that prolonged high interest rates could hurt the U.S. economy and noted that a cooling labor market indicates that inflationary pressures are easing.
Cryptocurrency markets react
Bitcoin (BTC) responded with a 2% price jump in the last 24 hours to trade above $59,000, while Ethereal (ETH) rose 3%, testing $3,200.
The rally extended the recovery in digital assets after a sharp sell-off over the weekend.
BTC fell 16.5% to a low of $53,500 on July 5, after hitting a local high of $63,800 on July 1. Glassnode, an on-chain analytics platform, described the drop as Bitcoin’s “deepest correction since late 2022.”
“Between May and July, the market experienced its deepest cyclical correction, falling more than -26% from its all-time high,” Glassnode said in a July 7 release. relationship.
Among the top 100 cryptocurrencies by market capitalization, pile (STX) recorded a 12% gain in a single day. Zk Sync (ZK) and Ave (AAVE) also performed well, with increases of 6.5% and 6.1% respectively. Polka dot (DOT) and Solana (SOL) both rebounded 0.5%.
In the last 24 hours, 34,000 cryptocurrency traders have been liquidated, for a total of $96 million in liquidations, second according to CoinGlass data. Despite the market’s bullish momentum, long positions accounted for 57% of margin calls.
In the stock market, futures tied to the S&P 500, Nasdaq 100 and Dow Jones Industrial Average all jumped 0.3%.
Related: Is This the End of the Crypto Bull Market? History Says No