At 2:30 this afternoon, the latest inflation figures from the United States were announced. The consumer price index (CPI) was lower than expected. 7.9% annual inflation was expected, but in reality inflation was ‘only’ 7.7%. A decrease of 0.5% compared to September. The rates of most cryptocurrencies immediately responded very positively.
CPI comes in at 7.7%, while 7.9% was expected.
— Michaël van de Poppe (@CryptoMichNL) Nov 10, 2022
US inflation is not too bad
Fortunately, inflation has fallen again. That suggests that the policy of the US central bank, the Federal Reserve (Fed), seems to be working. By raising interest rates, inflation is indeed falling, which is of course positive news.
This could mean that the Fed’s policy is not about to become even more persistent. This is what the market is especially afraid of when it comes to the release of new CPI figures. If the numbers are disappointing, there is a chance that measures could become stricter in the future, which is obviously bad for investors.
That is not the case this time. The reported CPI figures are even lower than initially forecast by economists and analysts. We are of course still dealing with inflation well above 7%. So we are not there yet, even though the news was positive this time.
Pumping BTC and ETH
As a result of the positive news, the price of bitcoin (BTC) huge. In just five minutes, the BTC rate increased by more than 7%! Of course, that fits in well with the picture we’ve already seen over the past few days; volatility is currently very high. Not only can the bitcoin price plummet in a short period of time, it now proves that it is still able to bounce back in the blink of an eye. pump.
Also ethereum (ETH) was doing good business. The second-largest cryptocurrency even managed to skyrocket by double digits in those same five minutes! The total increase was just over 10%. It is likely that with the upward moves of both ETH and BTC quite a bit shorts were liquidated so that the course really rose like a rocket.
Shorts pic.twitter.com/cOitqPvb6c
— zerohedge (@zerohedge) Nov 10, 2022