Markets
Cryptocurrency markets surge as inflation hits three-year low
Investors expect the Federal Reserve to cut interest rates later this year.
Cryptocurrency markets rebounded on Thursday after data showed that U.S. inflation fell to its lowest level in more than three years in June.
According to According to the Labor Department, the consumer price index (CPI) — which measures the cost of goods and services — fell 0.1% in June. That brought the annual rate down to 3%, the lowest since April 2021. Excluding food and energy prices, the core CPI rose 0.1% on the month and 3.3% on the year.
The data was below expectations, with Dow Jones analysts previously predicting a monthly increase of 0.2% and an annual increase of 3.4%, according to the Bureau of Labor Statistics.
Falling inflation gives the Federal Reserve more room to potentially cut interest rates later this year.
These data also come from the statement of Jerome Powell, chairman of the Federal Reserve, to have a reference to In his congressional hearing on Tuesday, Powell warned that prolonged high interest rates could hurt the U.S. economy, and noted that a weakening labor market indicates inflationary pressure is easing.
Cryptocurrency markets react
Bitcoin (BTC) reacted with a 2% price increase over the past 24 hours to trade above $59,000, while Ethereum (ETH) climbed 3% to test $3,200.
The rally extended the recovery in digital assets after the violent weekend sell-off.
BTC fell 16.5% to a low of $53,500 on July 5 after hitting a local high of $63,800 on July 1. Glassnode, an on-chain analytics platform, described the drop as “Bitcoin’s deepest correction since late 2022.”
“Between May and July, the market experienced its deepest cyclical correction, registering a decline of more than -26% from the all-time high,” Glassnode said in a July 7 statement. report.
Among the top 100 cryptocurrencies by market capitalization, Battery (STX) saw a 12% increase in a single day. Zk Synchronization (ZK) and Aave (AAVE) also performed well, increasing by 6.5% and 6.1% respectively. Peas (POINT) and Solana (SOL) both rebounded 0.5%.
Over the past 24 hours, 34,000 cryptocurrency traders have been liquidated, totaling $96 million in liquidations, according to According to CoinGlass data, despite the bullish market momentum, long positions accounted for 57% of margin calls.
In the stock market, futures contracts tied to the S&P 500, Nasdaq 100 and Dow Jones Industrial Average all jumped 0.3%.
Related: Is This the End of the Crypto Bull Market? History Says No