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US Inflation Data Penalizes Recent Crypto Rebound

Digital assets fell after the release of US inflation data. At the time of writing this article, cryptocurrencies as a whole have lost 3.66%. Bitcoin, the king of crypto, lost 2.63%. Ethereum fell 5.10%.

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The financial markets’ angel of doom is resurfacing. Let’s say better, he wakes up because in reality he had not disappeared. Let’s get back to the point! Since 1982, inflation across the Atlantic had not reached this level. In fact, the US Department of Labor reported that the consumer price index rose 7.5% year on year. Core CPI inflation also accelerated, reaching 6.0% over one year.


US inflation data – Source: Bloomberg



Figures that support the thesis of a tightening of monetary policy. A more than likely scenario for James Bullard, the St. Louis Fed Chairman has been aggressive about the tenor of the rate hike. He said in the Bloomberg columns:

I would like to see 100 basis points in the bag by July 1. I was already more hawkish, but I dramatically increased what I think the committee should be doing.



Wall Street Ended The Day Down Sharply


Inflation data combined with comments from James Bullard created panic in US markets during Thursday’s session. Technology stocks are the ones that suffered the most. The Nasdaq 100 composite index lost 2.10% during the session. Weakened by the fall of its giants, Apple, Alphabet and Microsoft lost between 2% and 3% of their value.


The S&P 500 index fell 83.14 basis points or 1.81% to 4504.04 points. The Dow Jones for its part fell by 1.47%. As for the European indices, they ended the day in scattered order. The Paris stock market index, namely the CAC 40, lost 0.41%. However, on the Frankfurt Stock Exchange, the DAX closed the day with a slight increase of 0.05%. The Swiss index, the SMI fell by 0.44%. For its part, the FTSE ended the day with a rise of 0.38%.


However, the global stock market got off to a rather good start in February. Will this Thursday’s session slow the markets in their growth momentum?


Bitcoin Retreated After A Strong Start To The Session


BTC/USDT price evolution




At the start of this Thursday’s session, the number 1 cryptocurrency had reached $45,800 for the first in a month. A notorious performance because the price came out of a daily low at $43,260. So an increase of 5.87% in just two hours. Caught up by the inflation data, bitcoin would end up making another dip much deeper than the previous one towards $42,985.


As of the time of writing, bitcoin happens to be above $43,000. For technical analysis experts, as long as the asset manages to hold the $40,000 support, there is no need to worry.


Looking in depth at the price chart of BTC/USDT, the medium and short term uptrend has not really been jeopardized as the current price is above the 20 and 50 day moving averages valued respectively at $39,667.45 and $42,419.30. When we look at the Fibo retracement, the 38.2 ($46,099.86) are resistance to the BTC. As long as it does not correct below 23.6, hope for a reversal from 38.2 remains plausible.


Altcoins Suffer


The first of the altcoins lost 5.10% after a nice morning ride towards $3,270. The bottom line is that the smart contract cryptocurrency is holding the $3,000 support so far.


XRP, which performed well after legal relaxations in its lawsuit with the SEC, fell 4.89% and moved a little further from the resistance bar of $1. Solana suffered a 5.55% share price loss. Terra Luna, the hardest hit of the 10, fell 6.13%.


On the mid-table altcoin side, we must remember the good rise of Theta Network which experienced an increase of more than 20% in yesterday’s session. Just like, the Play-to-Earn reward token, Axie Infinity which is currently up 32.47%. A breakthrough that was fueled by the launch of Axie Infinity Season 20.

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