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Bitcoin Tumbles Following Higher Than Anticipated US Core Inflation Data

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3 months ago

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The higher-than-anticipated US core Consumer Price Index (CPI) reading was followed by a decline in Bitcoin (BTC) price as it tumbled almost 1.5% to $56,168 at press time.

US Headline CPI Matches Forecast, Core CPI Exceeds It

US headline CPI, the metric typically used to assess the inflation rate in the country, came in according to expectations at 0.2% month-over-month (MoM), and 2.5% year-over-year (YoY) for August 2024. However, core CPI (MoM) printed 0.3%, slightly higher than the 0.2% forecasted by economists. 

For the uninitiated, the difference between the headline CPI and core CPI is the constituents of the basket of items they assess. While the headline CPI measures all item categories, including housing, transportation, services, medical care, food, and energy, core CPI excludes food and energy prices to give a more stable view of underlying inflation trends.

By removing the price of volatile items from its calculation, core CPI is often considered a more accurate indicator of long-term inflation.

Following the unexpected core CPI print, BTC witnessed a quick decline in price as it fell from around $57,000 to $56,168 at the time of writing. The wider crypto market displayed similar trends as Ethereum (ETH), Binance Coin (BNB), Solana (SOL), and Ripple (XRP), which are down by 2.1%, 1.3%, 4.6%, and 2.4%, respectively.

With the CPI data for August 2024 released, it seems all but certain that the US Federal Reserve (Fed) will begin its rate-cut cycle with a 25 basis points (bps) cut in September. In a note, Capital Economics’ Paul Ashworth said:

On balance, we still think the Fed will begin its rate cutting cycle with a more modest 25 bps cut. The 3.2% annual core CPI was mostly due to a 5.2% increase in shelter prices, while the three-month annualized core CPI rebounded only to 2.1% from a weak 1.6%.

Indeed, following the CPI data release, the probability of the Fed slashing rates by 25 bps next week has jumped to 83%, per data from CME FedWatch. Assuming the Fed reduces rates by 25 bps, it should instill some confidence in crypto and stock markets, fearing a 50 bps cut could signal the Fed not being fully confident in its ability to tackle inflation.

Source: cmegroup.com

What Lies Ahead For Bitcoin?

As BTC remains loosely range-bound between $52,000 to $70,000 on the daily chart, analysts are speculating on the future trajectory the leading digital asset’s price could take.

Some analysts opine that BTC’s current price action is reminiscent of a similar price consolidation in 2023. If the same scenario plays out in 2024, we could see a new Bitcoin all-time-high (ATH) price.

It will also be interesting to see the impact of the US Presidential Elections scheduled to happen in November 2024. Interestingly enough, some election-agnostic analysts have stated that no matter who wins the election later this year, BTC is slated to win in the long term.

At the time of writing, Bitcoin trades at $56,168 while the total cryptocurrency market cap sits at $1.94 trillion, down 2.3% in the past 24 hours.

bitcoin
Bitcoin is slightly down following the US CPI data | Source: BTCUSDT on TradingView.com

Featured Image from Unsplash.com, Charts from cmegroup.com and TradingView.com



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24/7 Cryptocurrency News

Robert Kiyosaki Hints At Economic Depression Ahead, What It Means For BTC?

Published

7 hours ago

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December 23, 2024

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Rich Dad Poor Dad author Robert Kiyosaki has issued a stark warning while hinting towards an economic depression ahead. In a recent X post, the renowned author said that the global market crash has already started, as he predicted earlier, which indicates that the financial market might enter a “depression” phase. Notably, this comes as the crypto market records immense volatility, sparking concerns over what’s next for Bitcoin (BTC).

Robert Kiyosaki Hints At Economic Depression Ahead

Robert Kiyosaki, in a recent X post, has revealed a stark warning of a looming economic depression. The Rich Dad Poor Dad author warned that a global market crash has already begun, citing Europe, China, and the U.S. as regions facing significant downturns.

In his post, Kiyosaki urged caution, advising individuals to safeguard their finances and maintain their jobs. “Global crash has started. Europe, China, USA going down. Depression ahead?” he asked while emphasizing the enduring value of assets like gold, silver, and Bitcoin. He added, “For many people, crashes are the best times to get rich.”

This warning aligns with Kiyosaki’s earlier prediction of what he called the “biggest crash in history.” Earlier this month, he encouraged his followers to prepare for financial turmoil, stating, “Please be proactive and get rich… before the BOOMER’s go BUST.”

However, this recent comment from Robert Kiyosaki indicates his sustained confidence in BTC. As the crypto market faces heightened volatility, Bitcoin could emerge as a hedge against traditional market instability, he noted. Besides, it also indicates that the flagship crypto, alongside gold and silver, might continue to gain traction amid this economic turmoil.

What’s Next For BTC?

Bitcoin price today has continued its volatile trading, losing nearly 1.5% over the last 24 hours to $95,323. The crypto touched a high and low of $97,260 and $93,690 in the last 24 hours, showcasing the highly volatile scenario in the market.

In addition, the US Spot Bitcoin ETF also recorded significant outflow, with BlackRock Bitcoin ETF witnessing its largest outflux since its launch. This has weighed on the investors’ sentiment, sparking concerns over a waning institutional interest.

However, despite that, many experts remained confident on the asset’s future trajectory. For context, in a recent X post, Peter Brandt shared a new BTC price target, indicating his confidence in the digital asset.

On the other hand, institutions like Metaplanet have also continued to boost their BTC holdings. These moves indicates that the institutions, as well as many investors, are bullish towards the long-term potential of the crypto. Besides, as Robert Kiyosaki said, the recent dip also provides a buying opportunity to investors, which might further boost Bitcoin to its new ATH ahead.

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Rupam Roy

Rupam is a seasoned professional with three years of experience in the financial market, where he has developed a reputation as a meticulous research analyst and insightful journalist. He thrives on exploring the dynamic nuances of the financial landscape. Currently serving as a sub-editor at Coingape, Rupam’s expertise extends beyond conventional boundaries. His role involves breaking stories, analyzing AI-related developments, providing real-time updates on the crypto market, and presenting insightful economic news.
Rupam’s career is characterized by a deep passion for unraveling the complexities of finance and delivering impactful stories that resonate with a diverse audience.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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Metaplanet makes largest Bitcoin bet, acquires nearly 620 BTC

Published

9 hours ago

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December 23, 2024

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Tokyo-listed Metaplanet has purchased another 9.5 billion yen ($60.6 million) worth of Bitcoin, pushing its holdings to 1,761.98 BTC.

Metaplanet, a publicly traded Japanese company, has acquired 619.7 Bitcoin as part of its crypto treasury strategy, paying an average of 15,330,073 yen per (BTC), with a total investment of 9.5 billion yen.

According to the company’s latest financial disclosure, Metaplanet’s total Bitcoin holdings now stand at 1,761.98 BTC, with an average purchase price of 11,846,002 yen (~$75,628) per Bitcoin. The company has spent 20.872 billion yen in total on Bitcoin acquisitions, the document reads.

The latest purchase is the largest so far for the Tokyo-headquartered company and comes just days after Metaplanet issued its 5th Series of Ordinary Bonds via private placement with EVO FUND, raising 5 billion yen (approximately $32 million).

The proceeds from this issuance, as disclosed earlier, were allocated specifically for purchasing Bitcoin. These bonds, set to mature in June 2025, carry no interest and allow for early redemption under specific conditions.

Metaplanet buys dip

The company also shared updates on its BTC Yield, a metric used to measure the growth of Bitcoin holdings relative to fully diluted shares. From Oct. 1 to Dec. 23, Metaplanet’s BTC Yield surged to 309.82%, up from 41.7% in the previous quarter.

Bitcoin itself has seen strong performance this year, climbing 120% and outperforming assets like the Nasdaq 100 and S&P 500 indices. However, it has recently pulled back from its all-time high of $108,427, trading at $97,000 after the Federal Reserve indicated only two interest rate cuts in 2025.

Despite the retreat, on-chain metrics indicate that Bitcoin is still undervalued based on its Market Value to Realized Value (MVRV-Z) score, which stands at 2.84 — below the threshold of 3.7 that historically signals an asset is overvalued.



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Altcoin Season

End of Altcoin Season? Glassnode Co-Founders Warn Alts in Danger of Lagging Behind After Last Week’s Correction

Published

12 hours ago

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December 23, 2024

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The creators of the crypto analytics firm Glassnode are warning that altcoins could lose all bullish momentum following last week’s market correction.

Jan Happel and Yann Allemann, who go by the handle Negentropic on the social media platform X, tell their 63,400 followers that “altcoin season,” which they say began in late November, could come to an abrupt end after alts witnessed deep pullbacks over the last seven days.

According to the Glassnode co-founders, traders and investors will likely have a risk-off approach on altcoins unless Bitcoin recovers a key psychological price point.

“Is This the End of Altcoin Season?

Bitcoin dominance is surging after dipping below $100,000, while altcoins are losing critical supports. Dominance has risen and resumed its upward trend, signaling a stronger BTC environment.

If BTC stabilizes above $100,00, we might see a pump in altcoins now in accumulation zones. Until then, Bitcoin appears poised to lead, leaving altcoins lagging behind.”

Image
Source: Negentropic/X

The Bitcoin Dominance (BTC.D) chart tracks how much of the total crypto market cap belongs to BTC. In the current state of the market, a surging BTC.D suggests that altcoins are losing value faster than Bitcoin.

At time of writing, BTC.D is hovering at 59%.

Looking at Bitcoin itself, the Glassnode executives say long-term Bitcoin holders are massively unloading their holdings as other investor cohorts pick up the slack.

“The Board Keeps Shifting. 

As BTC continues flowing out of exchanges during this dip, long-term holders are exiting forcefully, while short-term holders step in without hesitation.

Whales quietly accumulate, miners remain neutral, and selling pressure has merely reshuffled the board.

New hands are absorbing the sales.”

Image
Source: Negentropic/X

At time of writing, Bitcoin is worth $97,246.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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