Inflation Rise sparks Crypto Market Concerns
Inflation is on the rise, and this has traders worried about the Federal Reserve’s next move. The Personal Consumption Expenditures (PCE) price index, a key inflation metric, climbed to 2.7% in August. This uptick, tho expected, has fueled market anxiety.
The PCE index’s rise from 2.6% in July signals growing inflationary pressures. The core PCE, which excludes food and energy, also saw a 0.2% increase.These figures come after the Fed’s first rate cut this year, aimed at boosting employment and growth.
Bitcoin,the leading cryptocurrency,has felt the impact. On September 26, it dipped below $110,000, marking a 1.6% daily drop and a 5.5% weekly decline. Rising inflation and potential Fed policy changes are likely behind this fall.
Arthur Azizov, founder of B2 Ventures, believes institutional investors are now cashing out. “The market is overheated, and ETF inflows have dropped by over 50%,” he noted. Azizov sees $108,000 to $108,500 as a critical support zone for Bitcoin. A breach could push prices down to $90,000-$95,000.
With inflation accelerating, the Fed may reconsider rate cuts.This could negatively affect high-growth assets like Bitcoin, which benefit from low-interest-rate environments.
