The below is from a recent edition of the Deep Dive, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.
The news of today is the United States Consumer Price Index December release which came in at just over 7%. By many estimates, this could be the month that the rate of change in inflation peaks. If December is not the peak of acceleration, then it likely occurs in Q1. Our expectations for 2022 is that inflation remains significantly elevated but slows down.
As Wall Street consensus expected a higher CPI number, risk assets like bitcoin rallied higher on the release. Higher than expected inflation numbers are a higher cause for concern as this may accelerate the rate of change in the Federal Reserve Board’s monetary tightening policy.
The DXY, which measures the strength of the dollar relative to other fiat currencies around the world, fell sharply today following the release of the CPI reading.
Bitcoin and the dollar have been inversely correlated to each other for the greater part of the last two years, and a falling DXY looks to have aided the recent bounce in bitcoin.
Credit: Source link