Will Bitcoin Catch Up? Stock Market Rallies to New Highs as Biden says Inflation Peaked

  • bitcoinexchangeguide
  • Cryptocurrency News
Will Bitcoin Catch Up? Stock Market Rallies to New Highs as Biden says Inflation Peaked
Credit: © Reuters.

On Friday, Bitcoin hit $50,150 in tandem with the stock markets as US inflation reached a nearly four-decade high in November.

But soon after, BTC dropped to $47,000 and on Saturday went even lower. As of writing, BTC/USD is trading above $48k.

This time, Ether was hit much harder, falling to $3,840 but now recovered above $4k. This pushed ETHBTC from the 2021 high of 0.886 to near 0.080 today.

Meanwhile, S&P 500 continued to show strength and hit a new record high. All three major U.S. stock indexes advanced, actually, with the crypto market lagging. This is unlike what we have been seeing this year as Bitcoin’s correlation with stocks continues to increase thanks to its institutionalization.

This is why crypto trader Kaleo remains bullish on crypto and expects Bitcoin to resume its rally just like it did this summer when it lagged equity markets only to catch up later.

“Same sh*t is gonna happen again,” he said.

The record gains were posted by traditional markets due to the inflation reading being in line with the consensus.

The Labor Department said the consumer price index rose 6.8% in November from the same month a year ago, representing the fastest pace since 1982 and the sixth straight month of inflation rising and topping 5%.

The index, which measures what consumers pay for goods and services, reported a 0.8% spike in November after rising 0.9% in October.

President Joe Biden said on Friday that while inflation is a “real problem” primarily driven by severe supply chain problems, he feels it has now peaked.

“I think it's the peak of the crisis,” Biden told CNN.

“Peak inflation is behind. Inflation topped,” noted trader and economist Alex Kruger. “That's very bullish. Continued high inflation would trigger the Fed to accelerate the rates hiking process and is the single most important threat to the crypto bull market.”

Amidst this, JPMorgan Chase (NYSE: JPM ) still advanced the forecast of the Fed’s first interest rate hike from September 2022 to June. The bank also expects the Federal Reserve to accelerate the reduction of asset purchases and end the tapering process by mid-March.

The latest weakness in the market has the participants concerned if the crypto bull market is intact or if it is the beginning of a multi-year bear market that brings immense pain and more than 99% drawdown.

The Crypto Fear and Greed Index also shows sentiments of “extreme fear” with a reading of 16, the same as late July.

But some are still hopeful, given that the stock market is printing green. The year-end weakness could also be investors just locking in profit to fulfill their tax obligations.

Bitcoin BTC

$ 48,529.13

0.00%

-2.62%

+2.42%

See Details

Ethereum ETH

$ 4,033.06

-0.22%

-4.35%

+2.44%

See Details The post Will Bitcoin Catch Up? Stock Market Rallies to New Highs as Biden says Inflation Peaked first appeared on BitcoinExchangeGuide.

Continue reading on BitcoinExchangeGuide

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100

Related Articles