TL;DR
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April’s Consumer Price Index (CPI) report is coming soon, which is essentially just a list of products we all use in our daily lives.
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If the basket of goods has increased in price, it means that inflation is still rearing its ugly head. If not, it indicates that inflation is finally coming under control… there is only one problem.
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Even when the CPI data showed that inflation has declined in the past, the Fed has still raised interest rates.
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So the market thinks the Fed will raise rates no matter which direction we see the CPI numbers move.
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When interest rates are raised, most investors tend to move their money out of assets that are considered high risk (assets like Bitcoin). And selling pressure = price drops.
Full story
Okay, time for our bi-weekly Bitcoin check-in.
It has dropped over the past month or so, from $30k to about $27.4k at the time of writing.
Which, if you’re a short-term trader, isn’t great… but if you have a longer time horizon, you’re just thankful it’s no longer hovering around $16,000.
But wait…
We just had another bank failure and the last time that happened Bitcoin jumped up – because it is seen as a safe haven from the traditional banking system…so why fall this time?
Well, the April Consumer Price Index (CPI) report is coming out soon, which is essentially just a list of products that we all use in our daily lives.
If the basket of goods has increased in price, it means that inflation is still rearing its ugly head. If not, it indicates that inflation is finally coming under control.
…there’s just one problem.
The Federal Reserve (the people responsible for raising/lowering interest rates) is pretty stubborn when it comes to fighting inflation.
Even when CPI numbers in the past showed that inflation was on the decline, they’ve taken the ‘we’re on the right track, let’s keep raising rates to fight this even more’! approximation.
So the market thinks the Fed will raise rates no matter which direction we see the CPI numbers move.
And when interest rates are raised, most investors tend to move their money out of assets that are considered high risk (assets like Bitcoin).
And selling pressure = price drops.
OK, now you know!
