Crypto traders are celebrating a highly-anticipated report from the Fed that details a meaningful reversal in inflation for the first time this year.
The consumer price index (CPI) shows a year-over-year inflation increase of 8.5% in July, compared to 9.1% in June.
[adinserter block="1"]While inflation remains red-hot, global markets are popping on the prospect that high prices have hit a peak and are finally in reverse.
Macro economic expert and crypto bull Raoul Pal says he believes this is the beginning of a long-term reversal.
Pal predicts inflation will plummet over the next 18 months as concerns over inflation shift to realities of recession, forcing the Fed to reverse course on interest rate hikes that have pummeled crypto and equities.
“Peak inflation gives way to peak growth fear. I do think markets will react positively to weak growth, not negatively, broadly speaking.”
BitMEX founder Arthur Hayes is on the same page, predicting Fed Chairman Jerome Powell will reverse course and trigger a market turnaround.
Over to you Sir Powell, you know what to do. pic.twitter.com/qwMbdtriNm
— Arthur Hayes (@CryptoHayes) August 10, 2022
Hayes is particularly bullish on Ethereum (ETH) as the platform’s long-awaited shift to proof-of-stake approaches, with developers targeting a September launch date.
But not everyone is bullish. The pseudonymous crypto trader Capo, who was one of few to correctly call the 2022 bear market, believes Bitcoin (BTC) could hit a brick wall at $25,500 and begin a massive reversal.
Potential reversal point at 25000-25500, after CPI.
— il Capo Of Crypto (@CryptoCapo_) August 10, 2022
Ethereum is trading at $1,843 at time of publishing, up 9.3% in the last 24 hours.
Bitcoin is testing psychological resistance at $24,000, with the top crypto up 4% at $23,995.
Now that the CPI data is out, regional Fed manufacturing surveys are next, due in about a week. Those numbers are designed to show how business activity is performing at a more local and granular level.
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