Bitcoin reached a record peak above $123,600 but quickly corrected due to high U.S. inflation data.
Ethereum surged close to the 2021 peak, pulling cash flow into risky assets and reducing Bitcoin's dominance ratio in the cryptocurrency market.
MAIN CONTENT
Bitcoin reached $123,640 before dropping 5.4% due to increased market risk from U.S. inflation.
Ethereum increased from $1,386 to nearly $4,783 in 4 months, close to the peak of 2021.
Core inflation and the PPI index exceeded expectations, putting significant pressure on the Fed's policy in September.
How did Bitcoin reach its record price peak and what happened afterward?
Bitcoin reached a record high price of $123,640 and then dropped about 5.4% due to investor caution ahead of U.S. inflation data having a negative impact.
This price adjustment indicates that the cryptocurrency market remains sensitive to macroeconomic factors, particularly U.S. economic data. Currently, the price of Bitcoin is maintaining a range between the historical peak and a lower support area, with no strong factors to break this trend.
Experts believe the market will maintain an accumulation state until significant stimuli arise such as a rate cut move from the Fed or strong ETF inflows.
How has Ethereum's price increased and what impact does it have on the cryptocurrency market?
Ethereum has performed exceptionally, rising in price from $1,386 in April to nearly $4,783 last week, close to the historical peak of $4,864 achieved in 2021.
Ethereum's breakout has led to capital flowing into risky assets, reducing Bitcoin's dominance ratio from 65% to 59% within two months. However, due to the lack of sustainable structured investment flows, the altcoin market has become highly volatile.
The cryptocurrency market currently stands at a decisive threshold, where short-term growth spurts could be sharply corrected if there is no trend in cash flow and solid underlying indicators.
The strong growth of Ethereum is not only a positive signal for DeFi but also changes the market capitalization and cash flow landscape in the cryptocurrency market, indicating future development potential of the ecosystem.
Cryptocurrency market analysis, August 2023
What is the impact of the U.S. July inflation data on monetary policy and the cryptocurrency market?
U.S. inflation data for July shows that the costs of services and taxable goods continue to rise, with core inflation reaching a 6-month peak and PPI exceeding expectations, shrinking corporate profits.
These figures indicate that inflationary pressures remain persistent, posing significant challenges for the U.S. Federal Reserve in deciding the policy path for September. This reduces market expectations for a quick rate cut.
From a cryptocurrency perspective, tighter policies could negatively impact investment flows, causing accumulating risky assets to face more challenges.
Monetary policy will not be loosened hastily when inflationary pressures are still present, creating many challenges for global financial markets, including cryptocurrency.
Economist John Smith, 2023
Frequently Asked Questions
Could Bitcoin surpass the peak of $123,640 in the near future?
The ability to break out depends on macroeconomic factors such as the Fed's policies and cash flow from ETFs into the cryptocurrency market.
Why has Ethereum been rising faster than Bitcoin recently?
Ethereum attracts more capital flows thanks to its potential for application development and DeFi, drawing risk-taking investors away from Bitcoin.
How does U.S. inflation data affect the cryptocurrency market?
High inflation increases the likelihood that the Fed will maintain a tightening policy, limiting investment flows into risky assets like cryptocurrency.
Is the altcoin market experiencing significant volatility?
The lack of stable capital flows has caused altcoins to be highly volatile; this is a time to be cautious with altcoin investments.
What factors could drive significant price growth for Bitcoin and Ethereum?
The Fed's rate easing move or strong ETF inflows will be stimulating factors for price increases.
Source: https://tintucbitcoin.com/bitcoin-dao-dong-cho-tin-hieu-noi-long/
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