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DXY dropped sharply to 98.225 almost immediately after the CPI report.
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The Core Consumer Price Index, which excludes the food and energy sectors
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Ethereum needs only 10% more value in order to reach its new all-time high
The US Dollar Index has dropped by about 10 points this year. This is the sharpest six-month decline since 1991. This is good news for Bitcoin, and other cryptocurrencies as digital assets are often used to hedge against dollar depreciation.
Today, DXY remained steady at 98.5 ahead US CPI data as well as a looming deadline for US-China tariffs. DXY dropped sharply to 98.225 almost immediately after the CPI report.
The CPI report shows that the headline CPI for the month of July was +2.7% over the previous year, which is the same as June, but slightly lower than the expected 2.8%. The core CPI, which excludes the food and energy sectors rose to 3.1% year-over-year. This figure exceeded both the 2.9% recorded by June and market expectations. It indicates that inflationary pressures persist.
Related July CPI comes in at 2.7%. What this means for the price of Bitcoin
The dollar index dropping could provide additional tailwinds to both crypto and equity. While the current sentiment is bullish for cryptos, high inflation can often force investors to seek out safe-haven assets such as US Treasuries.
The S&P 500, or SPX, (an index that measures how well 500 major US companies are performing), is on the rise, thanks to central bankers around the world lowering rates and increasing the money supply. Equities are benefiting as the Fed is likely to follow suit.
Bitcoin and Ethereum saw a boost
After the CPI announcement, major cryptocurrencies like Bitcoin and Ethereum gained momentum. Bitcoin has risen and is now hovering at $119.5k despite falling below $118k.
Ethereum is even doing better, surpassing $4,400. It only needs about 10% more to reach a record high. This is not surprising, considering the massive institutional adoption of ETH. Since June, public entities such as BitMine and SharpLink Gaming purchased nearly 2 million ETH.
The derivatives perspective. A spot rally has a major impact on the futures markets. Here’s a news report on the record-breaking open interest in Ethereum.
Ethereum’s daily transactions have reached a new record of 1,74 million, surpassing the bull run peaks from 2021. Active user counts, DEX volumes, and stablecoin supplies are also on the rise.
Many users are now very optimistic that ETH is likely to reach its highest level ever by the end this year.
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