By Kimberly Crain
Crypto investors remain optimistic about the resurfacing of the Bitcoin bulls as the US inflation cools down.
On Thursday, the US Department of Labour was pleased to announce the cooling down of the inflation from June. The financial regulators confirmed that inflation dipped by 0.1% in June, which retraced the consumer price to its 2020 readings.
The dip in inflation signalled the probability of the Federal Reserve cutting the interest rate in Q4 of 2024. However, crypto investors anticipate that Bitcoin will gain bullish steam if the US overcomes the inflation environment in the coming month.
US Inflation Cools Down
In a July 9 blog post, the chief investment officer at Bitwise, Matt Hougan, projected that Bitcoin would reach $100,000 by 2024 if consumer prices maintained non-inflationary growth. The executive outlined the factors that might hamper Bitcoin bulls from being active in the coming months.
He noted that the drop in inflation obliged the Feds to slash their interest rates to shield risky assets such as crypto from further losses. In a separate statement, QCP Capital noted that the July 11 CPI release was the topic of discussion.
The trading platform noted that the CPI release sent the price of equities to rally. The QCP Capital team projects that cooling down inflation increased the Fed’s bet to lower the interest rate, which benefits BTC and other crypto assets.
The inflation easing bolstered the market-implied bet of Feds’ cutting the interest rate by 84.6% by September, the CME FedWatch Tool confirms.
Also read:Reflecting on the recent events in the crypto market, Hougan believes that the aftermath of Bitcoin halving and the launching of Ethereum and Bitcoin spot exchange-traded funds (ETFs) will support BTC in breaching the critical resistance level.
At press time 07:48 (UTC), Bitcoin dropped by 2% to trade below $56K in the last 24 hours. Despite the dip, the crypto investor believed the Bitcoin pullback was coming to an end as the US approached the 2024 general election.
Analysts Project Bitcoin to Increase as Consumer Price Reduce
Bitwise officials noted the negative short-term news has dashed the bullish narrative of Bitcoin. However, the long-term projection of the crypto market seems to renew investors’ hopes.
Hougan admitted that the contrasting prediction on crypto markets has proven beneficial to long-term investors. The Hougan prediction came at time when Bitcoin ETFs gained traction, registering $15 billion in the net.
The regulators are expected to approve more Bitcoin ETFs for institutional clients such as Morgan Stanley and Wells Fargo. Hougan expects the Bitcoin inflows to reach billions if the US Securities and Exchange Commission approves the pending crypto ETFs.
Nonetheless, the executives predict the Bitcoin pull back will ease after the German government’s Bitcoin sale and Mt. Gox repayment end. At the beginning of this month, the now-defunct crypto exchange, Mt. Gox, announced creditors’ repayment.
As Bitcoin investors expressed their fear of potential mass liquidation, Mt. Gox planned to repay the creditor with nearly $9 billion of tokens stolen in the 2014 hack. The Japanese crypto exchange expects to repay $73 million of Bitcoin Cash (BCH), constituting 20% of the token’s daily trading volume.
Crypto Traders Fear Bitcoin Bear to Resurface
For the past few weeks, the crypto traders have keen to on-chain movement of BTC as the German government sold Bitcoin seized from piracy company Movie.2k. The German government is expected to end the Bitcoin selling spree in the coming week.
Arkham Intelligence illustrates that the German government holds 6.14 BTC, valued at $352 million. The German government initially held 50,000 BTC, valued at $3 billion.
A statement from the chief investment officer of Arca, Jeff Dorman, reveals market markers have exited the crypto market due to the current situation. The Bahamian crypto exchange’s implosion has forced most crypto investors to exit voluntarily.
The executive noted that the ripple effect caused by the crashing of FTX has wiped out critical intermediaries, making trading too tricky. Dorman regretted that most liquidities in crypto have dried up, forcing the investors to shift to memecoin and other profitable equities.
At Tokenhell, we help over 5,000 crypto companies amplify their content reach—and you can join them! For inquiries, reach out to us at info@tokenhell.com. Please remember, cryptocurrencies are highly volatile assets. Always conduct thorough research before making any investment decisions. Some content on this website, including posts under Crypto Cable, Sponsored Articles, and Press Releases, is provided by guest contributors or paid sponsors. The views expressed in these posts do not necessarily represent the opinions of Tokenhell. We are not responsible for the accuracy, quality, or reliability of any third-party content, advertisements, products, or banners featured on this site. For more details, please review our full terms and conditions / disclaimer.