While the annual consumer price index in the US at 8.5% led to an increase in Bitcoin and technology stocks, analysts said that these figures show that the Fed will not need to be more aggressive in its tightening policy, and thus they expect an increase in risky assets.
While the consumer price index in the USA came below the previous statement as expected, the price of Bitcoin was also positively affected by 8.5% and increased by $ 1500 in 24 hours. Analysts, on the other hand, state that the low numbers may affect the Fed's movements positively.
“There may be no need to be aggressive in tightening”
Speaking to Fortune from the US media, Oanda's senior analyst Edward Moya said that if these figures continue in the same way, the Fed will not need to show aggressive moves in its tightening policy:
“Yes, for the remainder of the summer and beyond, the Fed's statements and inflation data will determine where Bitcoin will go. Bitcoin still correlates with commodities, especially the Nasdaq. This inflation report gave us all great hope that the Fed will not need to act aggressively in its tightening policy."
“35 thousand dollars can be seen in the short term”
Expressing that he expects fluctuating movements for the rest of the summer, Moya also made an interesting comment on the rise:
“Obviously I expect a volatile period, but if the momentum is up in Bitcoin, no one can predict where the uptrend might go. How high will Bitcoin go? If the inflation figures continue to come in this way, the jump may extend to 35 thousand dollars in the short term. But by short term, I mean the end of the year… However, the Fed's statements are of great importance. We need to hear more statements from them stating that they are satisfied with the inflation figures. Company deals like the Coinbase-BlackRock partnership will be one of the main drivers of this rise, I think.”
“Long-term investment assets demand low interest”
Emphasizing the importance of the Fed's September meeting, Leigh Drogen, CIO of the digital asset hedge fund Starkiller Capital, said:
“The rate hikes put such assets under serious pressure. Cryptocurrencies are the longest of the long-term assets! And long-term assets always ask for low interest. That's why the Fed's meeting in September is very important… If Bitcoin can rise from this region, the first target will be $ 28 thousand. Then 32 thousand dollars. I expect the dollar to fall and the Nasdaq to rise as well…”
Drogen also stated that if the highly anticipated Merge update on Ethereum goes smoothly, there could be an asset transition from Bitcoin to Ethereum.