US inflation hits 39-year high, Bitcoin hits all-time high on the news
Inflation in the United States reached a 39-year high, and the consumer price index rose to 6.8% in November. Traders can stop investing in risky assets before the end of the year as Bitcoin responds instantly to news.
Bitcoin’s price went from profit to loss after the US inflation report showed that consumer prices rose in November, eventually reaching a 39-year high. Market volatility makes Bitcoin worthless after its weekly decline on Wednesday, with a $ 100,000 forecast by the end of the year unlikely. BTC failed to even reach the $ 69,000 high. Crypto traders have been waiting for the US CPI release on Friday as most investors see Bitcoin as a useful inflation-resistant tool. The index for all commodities is reported to have risen 6.8% over the past year, the highest level since May 1982, when it was recorded at 6.9%.
The rise in the cost of living is also in line with economists’ forecasts in a Reuters poll and exceeds the October rise by 6.2%. Bitcoin surpassed the $ 50,000 mark, but then began to rally after inflation became an incentive for the Federal Reserve to make a decision and speed up its withdrawal from the monetary policy meeting in a few weeks. all monetary policy committees of the US Federal Reserve meet. Senior Market Analyst at Brokerage Oanda explains:
“If financial markets are under stress, the Fed could have a strong tightening cycle and the first thing to sell is your best asset, which for many traders will be a cryptocurrency.”
Eventually, Bitcoin recovered along with traditional markets, and traders found that inflation was not as high as some economists had warned. A Coinbase Research analyst noted that as BTC plummets for several weeks, crypto market analysts are starting to reduce the likelihood of a late rally similar to 2020:
“For tactical reasons, institutional investors cannot take much risk in the last weeks of December. Therefore, in our opinion, the cryptocurrency can be pegged to the range until the end of December. “