Crypto Market Shows Signs of Stability Ahead of U.S. CPI

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While some economists predict a jump in U.S. CPI compared to July, Factset research shows inflation is becoming less of a concern for large companies.

Bitcoin is trading at $25,933, up 0.66% over the last 24 hours, in the hours leading up to a release of U.S. CPI data., digital assets have remained fairly stable even as economists predict a small jump in CPI growth in August compared to July.

Economists anticipate a 0.6% rise in the U.S. CPI for August, an increase from July's 0.2%. This surge is attributed to escalating oil prices, with WTI Crude Oil nearing a 2023 peak of $89 per barrel.The CoinDesk Currency Select Index has also seen a modest rise of 1%, positioning itself at 1,195.80 while ether, another stands firm at $1,593, despite a 2.2% dip in the past week.

Bernd Sischka, Chief Commercial Officer at PowerTrade, a crypto options and derivatives exchange, said to CoinDesk in a note that this swift rally wasn't necessarily driven by a genuine shift from bearish to bullish sentiments. Instead, it appeared to be spurred by aggressive short covering and a liquidity crunch, leading to rapid and volatile price movements.

"For a sustained bullish momentum in Bitcoin's price, we'd need to see a consistent close above the critical resistance levels of $26,440 and $26,450,” Sischka said. “Although the market did breach this threshold intraday, it could not sustain above it by the close. This suggests impending near-term market weakness."

Sischka argued that the U.S. CPI number release generally is a catalyst for more market volatility as overall orderbook liquidity remains low.

 

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