US inflation hits 39-year high, Bitcoin hits all-time high on the news
US inflation hit a 39-year high and the consumer price index rose to 6.8% in November. Traders can stop investing in risky assets for the rest of the year as Bitcoin responds instantly to news.
Bitcoin price went from profit to loss after a US inflation report showed consumer prices rose in November, eventually hitting a 39-year high. Market volatility renders Bitcoin worthless to its weekly decline on Wednesday, with a forecast of $ 100,000 by year-end unlikely. BTC couldn’t even hit the highs of $ 69,000. Cryptocurrency traders waited for the US consumer price index to be released on Friday as most investors view Bitcoin as a useful tool that is inflation-resistant. The index for all commodities is reported to be up 6.8% over the past year, its highest level since May 1982 when it was fixed at 6.9%.
The rising cost of living is also in line with the predictions of economists in a Reuters poll and is above the 6.2% increase in October. Bitcoin broke the $ 50,000 mark, but then started gaining after inflation is the impetus for the Federal Reserve to decide and accelerate its withdrawal from the monetary policy meeting in a few weeks’ time. all monetary policy committees of the US Federal Reserve meet. Senior Market Analyst at Brokerage Oanda explains:
“If the financial markets are stressed, the Fed could have a strong tightening cycle and the first thing to sell is your best performing asset and that will be crypto for many traders.”
At the end of the day, Bitcoin rebounded alongside traditional markets and traders found that the rate of inflation was not as high as some economists had warned. As BTC drops for weeks, crypto market analysts are starting to lessen the likelihood of a late rally similar to 2020 behavior, the Coinbase Research Analyst noted:
“For tactical reasons, institutional investors may not take great risks in the final weeks of December. Therefore, in our opinion, the cryptocurrency could be pegged to a range for the rest of December. “