[Bitcoin Now] Rally on Slowing US CPI Inflation... Reviving Investor Sentiment

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] As the US July Consumer Price Index (CPI) inflation rate slowed, the leading cryptocurrency Bitcoin showed strength.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 9:02 AM on the 11th, Bitcoin was trading at $23,910 (approximately 31.07 million KRW), up 2.96% from the previous day. Bitcoin's price surged sharply immediately after the CPI announcement. It was $23,114 around 9:29 PM the previous day but rose by more than $1,000 to $24,127 about an hour later at 10:29 PM. At the same time, Ethereum, the leading altcoin, was recorded at $1,852 (approximately 2.41 million KRW), up 8.75% from the previous day.

Bitcoin's price rose as the US July CPI increased by 8.5% compared to the same period last year, falling short of June's 41-year high of 9.1%. With the inflation indicator easing, the market expects the Federal Reserve (Fed) to opt for a 0.5 percentage point interest rate hike instead of 0.75 percentage points at the upcoming September meeting. Cryptocurrency specialized media CoinDesk evaluated, "The market clearly feels hope that the Fed's attempt to curb inflation without triggering a recession is succeeding and that the base interest rate will be raised more moderately at the next September meeting."

As the inflation rate slowed, the US stock market, which shows a correlation with Bitcoin prices, also rose. The tech-heavy Nasdaq index closed up 360.88 points (2.89%) at 12,854.81. The large-cap focused S&P 500 index recorded 4,210.24, up 87.77 points (2.13%), marking its highest level since early May. Additionally, the Dow Jones Industrial Average closed at 33,309.51, up 535.10 points (1.63%) from the previous session.

As coin prices rose, investor sentiment also revived. According to cryptocurrency data provider Alternative, the Fear & Greed Index, which measures investor sentiment, was 41 points (fear) on the day, up 10 points from the previous day. Alternative's Fear & Greed Index ranges from 0 points, indicating extreme fear and pessimism about investing, to 100 points, indicating optimism.