Cryptocurrencies bounce up to 7% after US inflation data

The performance of cryptocurrencies was contrary to that of the main indexes of Wall Streetwhich showed a general drop of up to 1.1%.

What is expected of Bitcoin

Decrypto released its perspective on Bitcoin for this new year. For the company, in this 2023 the trend will predominate in regard to both Bitcoin and the crypto ecosystem.

In recent times, a pattern has been taking place regarding the behavior of Bitcoin. According to the previous years, the cryptocurrency complies with 4-year cycles, in which, generally; three are usually positive and one negative.

US inflation

The inflation in the US in January it was higher than expected, although lower than the previous month. Thus, inflation in year-on-year terms rose to 6.4%, above the 6.2% expected and below the 6.5% in December, which continues to confirm the slowdown in price risesbut not at the desired rate. This data will be key for the next meeting of the Federal Reserve (Fed). US stock futures fell as much as 0.5% on the news.

Cryptocurrencies fix the focus on the macroeconomic sphere. In this sense, Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, points out that US equities registered in the last five days “their worst week since the beginning of the year” motivated by the ‘hawkish’ comments of Federal Reserve officials ( Fed) after the surprising employment data.

For his part, Aslam is very clear about the possible scenarios after the inflation reading. “If inflation shows improvement and falls further from its past, then it would be the best news for market players and is very likely to bring more bulls to the market. However, if the reading starts to turn 180 and shows a rally, we could easily see traders panic as they are more than likely anticipating much tougher policy from the Federal Reserve. In these circumstances, it would even be wrong to think that the rate at the end of the year is close to the current projection of 5% to 5.25%.”, he sentenced.