Here’s why Bitcoin and ETH rise to new ATHs before returning to Earth

Bitcoin price is hitting an all-time high near $ 69,000 as ETH continues to move towards $ 5,000 after hitting a new high at $ 4,868 last night. However, shortly after hitting this new mark, traders began taking profits, causing a drop of nearly $ 7,000, bringing the BTC price below $ 63,000.

Interestingly, the latest breakout began as soon as a report from the US Bureau of Labor Statistics showed the consumer price index rose 6.2% a year, a 30-year high.

https://twitter.com/davidmarcus/status/1458474988328022021?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow noopener

“6.2% inflation means your $ 100,000 would only be $ 54,800 by then if we held it constant for 10 years.”

Rising energy costs have raised the consumer price index, according to the BLS, but food and other goods have been rising for at least six months. The current CPI is the highest since October 1990. Core inflation, a number that ignores the impact of rising commodity prices, rose 4.6%, levels not seen since 2005. 1991.

CPI data highlights a record 30-year inflation rate. Source: FRED

Amid rising inflation, the Federal Reserve and the Biden administration continued to announce that the situation was “under control,” but the stock market reacted negatively to the news. In the meantime, calls are being made for the Fed to end its easing policy and raise interest rates. Many argue that the central bank has cornered itself and has no easy options for the future, as a rate hike could make it harder to repay US sovereign debt.

With interest rate controls the Fed’s primary tool for influencing markets, there seems to be no other way but to keep printing money to meet the ongoing challenges.

Cryptocurrency holders are uniquely positioned to benefit from these latest developments as the depreciation of fiat currencies such as the dollar has highlighted the strength of Bitcoin and other alternative money as a hedge against currency depreciation and inflation.

Along with slight declines in traditional markets, prices for BTC and ether have risen, a dynamic that analysts like Anthony Pompliano refer to as “asymmetrical price action” where investors see the extremely hot stock markets and unsustainable central bank monetary policy being risky Assets like Bitcoin make investments attractive.

According to data from Bitcoin Stimulus, Americans who invested their $ 1,200 stimulus check in BTC as of April 2020 will now have $ 12,172, or a 914% gain.

Present value of the stimulus checks of USD 1,200 as of April 15, 2020. Source: Bitcoin stimulus

According to Sam Bourgi, Bitcoin is seen by many as the best “hard money” alternative to national currencies and:

“Bitcoin outperformed gold, the most popular inflation hedge, with a significant return, up more than 130% compared to gold’s 4% decline.”

BTC / USDT daily chart: Source: TradingView

Immediately after hitting those strange new highs, the price of Bitcoin fell back to $ 62,700 before recovering slightly to around $ 64,700 and most altcoins suffered near double-digit losses.

While the current downward move is sure to shock some investors, a slight correction after a new all-time high in Bitcoin is common practice.

Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews

Annie

Bitcoin magazine

Follow the Youtube Channel | Subscribe to telegram channel | Follow Facebook page