Home Business News Outlook improves for cryptocurrencies after US inflation

Outlook improves for cryptocurrencies after US inflation

by LLB Finance Reporter
13th Jul 23 10:18 am

Cryptocurrencies were recording some volatility as traders monitor economic data in particular in the US. The country saw several data releases on the job market and inflation figures that affected expectations.

Slowing inflation could push the Federal Reserve toward a softer stance regarding monetary policy.

More stable interest rates could help reduce pressure on cryptocurrencies as risk aversion could decrease among investors.

Denys Peleshok, Head of Asia at CPT Markets told LondonLovesBusiness.com, “If inflation continues to decrease rapidly in the coming months, traders could price in reductions in interest rates in the US for sooner which could fuel appetite for risk over the medium to long term.

“Changing interest rates expectations could support the price of bitcoin and other cryptocurrencies in the coming months. In addition, the market could find additional support if the US job market and the US economy continue to show resilience.

“Positive developments at the economic levels could help improve traders’ appetite for risky assets like cryptocurrencies and help extend this year’s recovery.

“Although currently volatile, prices stabilized to a certain extent near this year’s highs and traded in a range for the last two weeks.

“The currently relatively stagnating prices followed the surge that resulted from the announcement of Bitcoin ETF applications in the US. The latter had stimulated demand expectations for bitcoin in particular as institutional and individual investors could enter the market in larger numbers through such investment vehicles.

“As a result, cryptocurrency traders could remain attentive to the response of the SEC regarding current ETF applications. Approval from the SEC could result in a stronger market for bitcoin and potentially boost prices.”

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