On Wednesday, January 12, the United States has reported the highest inflation at 7% in over four decades since 1982. Well, this doesn’t seem to have a greater impact on the Bitcoin price as it continues to trade above $43,500 moving further away from the death cross.
As of press time, Bitcoin is trading 2.45% up at a price of $43,644 with a market cap of $827 billion. As we reported, U.S. inflation would play a key role in deciding the Bitcoin momentum. Although the inflation number is pretty high, it’s quite in line with what was expected. Matt Maley, chief market strategist for Miller Tabak + Co told Bloomberg:
“The fact the inflation number was not as high as some of the whisper numbers should help risk assets of all stripes today”.
Inflation largely in line. It’s ok. https://t.co/JSJNV10hz8
— Alex Krüger (@krugermacro) January 12, 2022
It means that although the Federal Reserve will continue with its quantitative tightening (QT) program, there’s a fair expectation that it won’t turn aggressive further from its current stand. We are expecting four interest rate hikes this year in 2022 that might suck liquidity out of the crypto market and thus lead to market volatility.
However, the contrarian approach also holds true at the same time that more and more people will participate in the crypto space to get inflation-beating returns. Thus, Bitcoin is set to emerge as a strong inflation hedge going ahead.
Altcoins Pose A Strong Show
the altcoin space is leading to a very strong performance. After a sloppy last week, Ethereum (ETH) has bounced back again above the $3,350 level. Binance Coin (BNB) has also registered strong 4.5% gains while Solana (SOL) has registered 7% gains reclaiming $150 once again.
In the top ten, Terra’s LUNA remains an outperformer gaining over 10% and moving past $80 levels. The broader cryptocurrency market has also gained 4% over the last 24 hours and is currently above $2.07 trillion. This week’s closing will be crucial in determining the market momentum over the next month.