Bitcoin and other main cryptocurrencies lost ground after knowing the August Consumer Price Index (CPI) in the United States, a fact that turned out to be higher than expected. “This caused a drop in equity markets and pointed to an aggressive rise in interest rates. The top 10 cryptocurrencies by market capitalization crashed,” Zala commented.
According to Zala, this inflation figure for the consumer price index (CPI) in the United States rose 0.1% in the month and 8.3% in the year. Therefore, he explained that these high inflation figures collapse the optimism of investors and prompt the Federal Reserve to apply even harsher increases in interest rates.. “Everything indicates that, after the meeting of the Federal Open Market Committee (FOMC) next week, the rate hike will be 75 basis points”, he highlighted.
“Sentiment is bearish across markets, global economies have started to slow and leading economic indicators show signs of aggravation. Sentiment in the cryptocurrency market remains at levels of extreme fear, with the Fear and Greed Index below 30 points.”he added.
The Ethereum Merge is now complete
On Thursday morning Ethereum completed its long-awaited merger. Thanks to this technical development, Ethereum changed its consensus model from Proof of Work to Proof of Stake. According to Zala, ETH price is hovering above the trendline support and just below the $1,600 resistance zone. He highlighted that ETH bullish investors have been very active in recent weeks, placing strong bids above the dynamic trend line support. “The next resistance level is at $1,785,” he mentioned.
While ETH’s current price action is less bullish than Merge supporters and ETH bulls might have expected, the actual switch to PoS appears to have been a success and perhaps, over time, the benefits of PoS will translate into bullish ETH price action.
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Source: Ambito
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