After slipping to lows of $15.5K amid FTX’s liquidity crunch, Bitcoin (BTC) gained momentum because of better-than expected consumer price index (CPI), numbers released by U.S. Bureau of Labor Statistics.
IncomeSharks is a platform for market education and cryptography tweeted:
“Bitcoin has an easy path back to $20k as Stocks pushing up and positive CPI numbers.”
Bitcoin rose by 3.78% over the past 24 hours to $17,281 in intraday trading according to CoinMarketCap.
CPI soared lower than expected, rising by 0.4% in Oct, the lowest level since January 2022. The U.S. Bureau of Labor Statistics pointed out:
“The all items index increased 7.7 percent for the 12 months ending October, this was the smallest 12-month increase since the period ending January 2022. The all items less food and energy index rose 6.3 percent over the last 12 months … all of these increases were smaller than for the period ending September.”
BTC markets reacted bullishly to the lower CPI numbers. This could indicate that there is a possibility of a decline in inflation. Federal Reserve (Fed), will lower interest rates, which have been damaging to the crypto ecosystem.
The Fed has been raising interest rates up to 75 basis points (bps), and this is a major factor that has prevented cryptocurrencies from getting a significant advantage.
Despite positive CPI numbers, crypto market is still not in the clear as bears continue their attacks. Material Indicators, market insight provider explained:
“CPI was lower, Jobless Claims were higher. FireCharts illustrates the initial reaction of the crypto market to an increase in the expected economic numbers. Bear Market Rally is still alive BTC.”
The digital asset space has also been affected by the collapse in FTX, one the most prominent crypto exchanges.
Reportedly, the liquidity issue facing FTX might have emanated from the exchange’s CEO, Sam Bankman-Fried, secretly transferring at least $4 billion to boost its trading arm Alameda Research, with part of the funds being customer deposits.