Bitcoin and Ethereum Volatility Spike After Soft PPI
Recent data reveals that the crypto market experienced a spike in volatility following the release of US inflation data. Bitcoin and Ethereum saw a brief rally, but quickly lost these gains. This fluctuation is interesting because it does not align with the United States economy, which is entering a disinflation phase.
Main Breakdowns:
– Bitcoin and Ethereum saw a modest spike in volatility after US inflation data showed a cooling trend.
– Bitcoin rose 0.60% and Ethereum jumped 0.39% initially, but these gains were erased shortly after.
– The total crypto market capitalization also experienced a small leap.
– The spike in volatility coincided with a decrease in US producer prices, indicating a shift in investor sentiment.
– The Producer Price Index for final demand only increased by 0.1% in June, the smallest rise since August 2020.
Contrary to Predictions, Inflation Rates Ease
Despite economists’ predictions, inflation rates appear to be easing. The June data for the Producer Price Index suggests that supply chain bottlenecks are diminishing and there is a slowing demand for goods due to rising interest rates.
Hot Take:
The calming of inflation rates and the subsequent volatility in the crypto market highlight the interconnectedness of global economic factors. It is important for investors to closely monitor economic indicators and adapt their strategies accordingly.