Bitcoin (BTC) and Ethereum (ETH) prices skyrocketed after the U.S. Bureau of Labor Statistics released the Consumer Price Index (CPI) data for November. The CPI in the US falls to 7.1% from 7.7% in October. It is the lowest since December. The expected CPI data for November was 7.3%.
Bitcoin (BTC) price rallied over 3% after the inflation data. In the last 24 hours, the BTC price is now up 6% from a low of $16,944, hitting a high of $17,905. The trading volume rises over 25%, indicating participation from traders.
Ethereum (ETH) price also rallied over 3% after the CPI release, with the current price trading at $1,336. The 24-hour low and high are $1,246 and $1,338, respectively, indicating a rally of over 7%. The trading volume rose 35% in the last 24 hours.
US CPI Inflation For November Comes In At 7.1%
The U.S. Bureau of Labor Statistics on December 13 released the November CPI data of 7.1% against the market expectations of 7.3%. The Core CPI comes in at 6.0% against the expected 6.1% in November, falling from 6.3% in October.
The energy index increased by 13.1%, and the food index was up by 10.6 %, all of these increases were smaller than for the period ending October. However, compared to the previous month, the CPI edged up 0.1% only, less than forecasts of 0.3%.
Wall Street also expected the CPI data to come in lower as a result of cooling inflation. U.S. stocks jumped Monday, with investors anticipating softer inflation and a smaller interest-rate increase from the Federal Reserve this week. The Dow Jones futures are up 2.5% on Tuesday, and the S&P 500 and Nasdaq futures are up nearly 2.8% and 3.5%.
JPMorgan predicts a 10% rally in stocks if the U.S. CPI comes in at 6.9% or lower. However, JPMorgan expected a CPI reading of 7.2%. While the U.S. stock market showed less correlation with the crypto market in recent times, the lower CPI also helped Bitcoin and Ethereum price rally.
Popular analysts Michael van de Poppe and “Wolf of Wall Street” Jordan Belfort predicted that Bitcoin and Ethereum prices could rally by Christmas, with US CPI and Fed rate hike being the crucial factors indicating the crypto market bottom.
Bitcoin Price To Rally More With Dovish Fed
The fall in November CPI will influence the Federal Reserve’s interest rate hike decision the next day. Fed Chair Jerome Powell earlier indicated a slowdown in the rate hike pace in December and the coming months.
According to CME FedWatch Tool, a probability of a 50 bps rate hike before the CPI number was 72.3%. After the CPI data, a probability of a 50 bps rate hike jumped over 80%.
The US Dollar Index fell by 1.30% to 103.70 after the CPI numbers. Thus, investors can expect an increase in Bitcoin and Ethereum prices in the coming weeks.
Also Read: Bitcoin And Ethereum Price Breaks Higher, Wall Street On US CPI
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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