Crypto Traders Accumulate Highest Buying Power In Two Years

The crypto market has been trading in the green over todays session as it sees some relief from macro-economic factors. Today, the U.S. published Julys Consumer Price Index (CPI) print which hinted at a slowdown in inflation and allow Bitcoin, Ethereum, and others to experience some relief.

CPI has been a key metric over the past months as the U.S. Federal Reserve (Fed) attempts to mitigate it by hiking interest rates and reducing its balance sheet. Thus, global markets have seen less liquidity which has negatively impacted risk-on assets, such as equities and cryptocurrencies.

At the time of writing, Bitcoin (BTC) trades at $23,900 with a 4% profit in the last 24 hours while Ethereum (ETH) trades at $1,800 with a 9% profit over the same period. The second crypto continues to outperform BTC as investors seem to be migrating into the altcoin sector.

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BTC’s price moving sideways on the 4-hour chart. Source: BTCUSDT Tradingview

Julys CPI print see a decline on the back of commodities trending downwards, particularly the energy sector saw falling prices. However, Rick Rieder, CIO at investment firm BlackRock, believes inflation its still running at a worryingly high rate.

This might continue to operate as a headwind for digital assets and risk-on assets over the long run but might allowed the Fed to be less aggressive with their monetary policy. Rieder said the following on the potential long-term bullish effect of less inflation:

Over time, we think the slowdown in economic growth, the continuation of the Federal Reserves assertive Hiking Cycle and the possibility of resolution with several persistent supply chain issues should influence broad inflation lower.

Rieder claims inflation might continue to trend lower or moderate in the coming months. This might remove uncertainty across the crypto market and provide these assets with enough support to reclaim previous highs.

Bitcoin And Crypto Could Extend Bullish Momentum?

The biggest headwinds for crypto will be the Feds Federal Open Market Committee (FOMC), BlackRocks CIO said. At that time, the financial institution might announce another substantial interest rate hike, but theres still a lot more data to come between now and the meeting.

In this environment, data from crypto research firm Santiment records a spike in the supply of Tether (USDT) on exchange platforms. This hints at the potential buying pressure from market participants waiting for more clarity around macro-economic factors.

The recent CPI print might provide that clarity, at the time of writing, USDTs supply on exchanges stands at 42% for the first time since April 2022. At that time, the market was about to enter a massive bull run into new all-time highs.

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Source: Santiment via Twitter