The price of Bitcoin jumped to just over $18,000 on Binance. While the immediate price correction brought it down to $17,700 just a couple of hours after, the reaction of the market to the US CPI report is quite good.
The crypto industry still has enough hidden power to get through the crypto winter without too many losses.
The CPI rose by 0.1% in November
A slowing consumer price index indicates that the Fed managed to curb inflation by a small margin. It is not a decisive victory or even a sign that the US economy is on a path to recovery, but it is still something that infused hope in many experts.
The crypto market responded by creating a series of small rallies, with many cryptocurrencies shooting up in price.
The Bitcoin price immediately climbed up by 5.2% and broke through the $18K resistance line for a couple of minutes. It has since descended to $17.7K, which is still a healthy 3.5% growth.
A sign of relief was heard across the crypto community. The BTC’s impressive growth was accompanied by other coins like Ethereum, which grew by a solid 6.9%. The CMI (Coindesk Market Index) improved by 3.8%, indicating growth across multiple digital assets.
Bitcoin still depends on the US economy and the price of the US dollar. Since many consider BTC the best hedge against fiat currencies but understand that it is an inherently risky asset, it holds a unique position in the financial world, moving unpredictably yet with a strong correlation with economic events relevant to the US economy.
Should we expect a bigger price increase?
This particular price surge looks like a temporary reaction of the market to a piece of economic data published at the right time. The market was eager for something to happen due to the price stagnation in the market, with neither bulls nor bears taking charge.
The US CPI report was a perfect opportunity for a rally, but expecting this small bump to turn into a long-term trend is unrealistic. However, it is still a good week for bulls.