A more-than-expected decline in consumer price inflation in the U.S. that triggered a relief rally across major markets and asset classes failed to buoy sentiment in the cryptocurrency market. Overall crypto market capitalization is almost steady at $1.4 trillion.
Data released by the U.S. Bureau of Labor Statistics on Thursday showed headline annual CPI falling to 3.2 percent, from 3.7 percent in the previous month. Markets had expected it to fall to 3.3 percent. The core component, which was seen steady at 4.1 percent, declined to 4 percent. Headline month-on-month CPI which was seen dropping to 0.1 percent, from 0.4 percent earlier, recorded a flat reading. The core inflation which was seen steady at 0.3 percent actually declined to 0.2 percent.
Renewed inflation concerns that had been triggered by Fed Chair’s recent lament about the Fed having not done enough to contain inflation, soon gave way to relief and expectations of a policy pivot by the Fed.
The CME Fed Watch tool which reflects the expectations of interest rate traders shows a spike in rate cut expectations. The target possibility for a rate cut in March 2024 increased to 32.7 percent, versus 18.2 percent a week earlier and 16.7 percent a month earlier. Likewise, expectations of a rate cut in May 2024 has increased to 67.8 percent, versus 47.8 percent a week earlier and 38.1 percent a month earlier.
Yield on ten-year U.S. bonds dropped to a low of 4.432 percent on Tuesday and is currently hovering near 4.481 percent.
The euphoria of a softer CPI reading spilled over to Wall Street, lifting Nasdaq Composite 2.4 percent and the Dow Jones 1.4 percent on Tuesday. Wall Street Futures currently indicate moderate gains on opening.
The Dollar Index, a measure of the Dollar’s relative strength, dropped to as low as 103.99 on Tuesday. It is currently trading at 104.11.
Though a fall in general interest rates bodes well for cryptocurrencies that are typically non-interest bearing, crypto market capitalization has not recorded any significant uptick.
In the past 24 hours, Bitcoin touched a high of $36,693.17 and a low of $34,948.50. It is currently trading at $36,182.04, recording overnight losses of 0.76 percent. The leading cryptocurrency which dominates 50.7 percent of the overall crypto market is however holding on to weekly gains of 2.2 percent and year-to-date gains of 119 percent.
Ethereum too suffered a decline of 1.1 percent in the past 24 hours. The leading alternate coin, with a crypto market share of 17.4 percent is also holding on to weekly gains of 6.9 percent and year-to-date gains of 68 percent. The 24-hour trading range for Ether was between $2,054.15 and $1,939.28.
Among the top-10 non-stablecoin cryptocurrencies, Solana (SOL) dazzled with overnight gains of more than 17 percent. SOL also tops weekly gains with a rally of 44 percent and year-to-date gains with a surge of 530 percent. The brilliant rally helped Solana jump to the 6th rank overall in market capitalization. Toncoin (TON) slipped from the top-10 league following an overnight decline of 2.7 percent.
31st ranked Kaspa (KAS) tops overnight gains among the top 100 cryptocurrencies with a surge of close to 27 percent. 68th ranked dYdX (ETHDYDX), 59th ranked Celestia (TIA), 74th ranked PancakeSwap (CAKE) and 29th ranked Cronos (CRO) have all added more than 20 percent in the past 24 hours.
67th ranked Bitget Token (BGB) has declined 4.2 percent overnight. 13th ranked Toncoin (TON), 70th ranked XDC Network (XDC) and 5th ranked XRP (XRP) followed with overnight losses exceeding 2 percent.
50th ranked FTX Token (FTT) tops weekly gains with a rally of more than 194 percent. 60th ranked Celestia (TIA) follows with gains of 168 percent in the past week. The uptick in TIA comes amidst reports of its departure from the conventional monolithic blockchain model to a decoupling consensus.
78th ranked Gas (GAS) declined the most in the past week, by 28 percent. 87th ranked Trust Wallet Token (TWT) declined 15.8 percent whereas 13th ranked Toncoin (TON) slipped 13 percent in the past week.
42nd ranked Arbitrum (ARB) is the highest-ranking cryptocurrency to trade with year-to-date losses.
Amidst the reprieve afforded by the softer CPI readings, all eyes on the macro-economic front are now on the producer-price inflation readings and the retail sales update due from the U.S. Producer price inflation is seen falling to 0.1 percent in October from 0.5 percent in the previous month. Retail Sales is expected to show a decline of 0.3 percent, versus 0.7 percent growth recorded in the previous month.
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