Cryptos Rally Ahead Of U.S. CPI Data

Prices of major cryptocurrencies rallied in the past 24 hours as markets geared for the release of the consumer price inflation data from the U.S. on Wednesday morning. The less-than-expected level of producer price inflation also supported sentiment.

Data released on Tuesday by the U.S. Bureau of Labor Statistics showed factory gate prices in July falling to 0.1 percent from 0.2 percent in the previous month. Markets had anticipated the month-on-month producer price inflation to be steady at 0.2 percent. The core component surprisingly recorded a flat reading. Markets had expected the same to decline to only 0.2 percent from 0.3 percent in the previous month.

The CME FedWatch tool currently shows a 100-percent probability for a rate cut in September. The probability for a rate cut of 25 basis points is 47.5 percent whereas the expectation of a 50-basis points rate cut is higher at 52.5 percent. The Fed’s next interest rate decision would be known on September 18. The current interest rate of 5.25-5.50 percent, which is a 23-year high has been in force since July 2023.

Consumer price inflation updates for July due from the U.S. on Wednesday are expected to show headline annual inflation remaining steady at 3 percent. The core component thereof is seen falling to 3.2 percent from 3.3 percent previously. Month-on-month inflation as well as its core component are both seen at 0.2 percent.

The Fed’s annual inflation target is 2 percent. In the Summary of Economic Projections issued in June, the Fed had raised its inflation forecast for 2024 to 2.6 percent from 2.4 percent projected in March. Acknowledging the sticky inflation, the 2025 projection has been increased to 2.3 percent from 2.2 percent projected earlier whereas the 2026 level has been maintained steady at 2 percent.

Nevertheless, market expectations of an easing in inflation and a consequent Fed rate cut remain strong amidst the steady decline in inflation. Headline annual consumer price inflation in the U.S. was 3.5 percent in March, 3.4 percent in April, 3.3 percent in May and 3 percent in June.

Expectation of an easing in inflation and a rate cut by the Fed supported crypto market sentiment lifting overall crypto market capitalization by 3.3 percent to $2.15 trillion, from $2.07 trillion a day earlier. 54th ranked Notcoin (NOT) topped overnight gains among the top 100 cryptocurrencies with a surge of more than 17 percent.

Meme category market capitalization also rose 3.9 percent overnight to $40 billion. 69th ranked Brett (BRETT) which gained more than 5 percent, topped overnight gains among the meme cryptos ranked within the top 100 overall.

The AI & Big Data category recorded an overnight spike of 5.1 percent, lifting market capitalization to $23.6 billion. 20th ranked Near Protocol (NEAR) which gained more than 8 percent topped overnight gains in the category amongst the cryptos ranked within the top 100 overall.

Bitcoin traded between $61,572 and $58,506 in the past 24 hours. It is currently trading at $61,190 implying overnight addition of 4.3 percent, weekly gains of 6.2 percent and year-to-date rally of 44.7 percent. At its current price, the leading cryptocurrency is trading 17 percent below the all-time high recorded in March 2024.

Data from Farside Investors on Bitcoin Spot ETF products in the U.S. showed a net inflow of $39 million on Tuesday versus $27.8 million a day earlier.

Ethereum rallied 4.5 percent in the past 24 hours to trade at $2,741.65, around 44 percent below the all-time high. Amidst weekly gains of 8.1 percent, the leading altcoin’s year-to-date gains are now above 20 percent.

Data from Farside Investors on Ethereum Spot ETF products in the U.S. showed a net inflow of $24.3 million on Tuesday versus $5 million a day earlier.

4th ranked BNB (BNB) added 1.4 percent overnight and 6.7 percent on a weekly basis to trade at $529.66.

5th ranked Solana (SOL) gained 2 percent overnight but is still saddled with losses of more than 4 percent in the past 7 days. SOL is currently trading at $147.39.

7th ranked XRP (XRP) rallied 2.3 percent overnight and more than 12 percent in the past week to trade at $0.5806. Nevertheless, the cryptocurrency issued by Ripple Labs is grappling with year-to-date losses of more than 5.5 percent.

8th ranked Toncoin (TON) surged 15.3 percent overnight to trade at $7.23. TON also tops year-to-date gains among the top 20 cryptocurrencies with an addition of 213 percent.

Dogecoin (DOGE), ranked 9th overall has also gained 2.1 percent in the past 24 hours to trade at $0.1062.

10th ranked Cardano (ADA) gained 2.8 percent overnight and 0.7 percent over the past week. ADA is currently trading at $0.3421.

31st ranked Sui (SUI) is the only cryptocurrency among the top 100 to trade with overnight losses of more than a percent. SUI has slipped 5.2 percent overnight.

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