• The Federal Reserve Bank of Cleveland’s inflation nowcasting tool predicts a surge in both the Consumer Price Index (CPI) and Core CPI.
• This sharp increase in inflation metrics signals increased pressures on the Federal Reserve to curb inflation.
• On-chain analysis shows that Bitcoin’s price resilience is hinged on short-term holder cost basis.
Cleveland Fed Nowcasts Signal Escalating Inflation Pressures
The Federal Reserve Bank of Cleveland has released its latest monthly data from their inflation nowcasting tool, which provides daily nowcasts for two pivotal price indexes – the Personal Consumption Expenditures (PCE) and the Consumer Price Index (CPI). According to their August data, the CPI is predicted to accelerate to 3.82%, marking a significant 0.79% increase within a month. Further, the Core CPI, stripped of volatile food and energy components, is also forecasted to augment by 0.38% within the same period, leaving the year-over-year core CPI at 4.46%.
Crypto Market Bracing For Impact
This sharp upswing in inflation metrics signals increased pressures on the Federal Reserve to curb inflation. The data emphasizes that this task ahead will be arduous and underscores the need for carefully calibrated strategies in order to mitigate amplified inflationary effects. As such, financial markets are preparing for potential impacts as heightened pressure may push investors away from traditional assets towards digital assets like cryptocurrency due to its relative stability and liquidity profile when compared with other asset classes during times of economic instability or uncertainty.
Unprecedented USDT/RUB Trade Volume Surge
Recent geopolitical events have further exacerbated market conditions as investors flee riskier assets and look for safe havens like stablecoins such as USDT or USDC to hedge against market volatility caused by Russia’s recent sanctions announcement against Ukraine and other neighboring countries. These events have lead to an unprecedented surge in trade volume between USDT paired with RUB pairs on various exchanges, indicating increasing demand for cryptocurrencies as a source of safety from macroeconomic turmoil around the world.
Bitcoin Price Resilience Hinged On Short-Term Holder Cost Basis
On-chain analysis shows that Bitcoin’s current price resilience is hinged largely on its short-term holders who are reportedly holding onto their coins despite market pressures due their cost basis being higher than current market prices though these holders could capitulate under concentrated selling pressure if current market conditions persist over an extended period of time leading to further losses in value for Bitcoin across various exchanges worldwide .
Short-Term Investors Capitulate Under Market Pressures
As market pressures continue mounting around escalating inflation rates coupled with geopolitical risks stemming from Russia’s recent sanctions announcements against Ukraine and other nearby countries, short term investors could capitulate under concentrated selling pressure due to depressed prices which would then put even more downward pressure onto already bearish markets leading to even further losses should these conditions persist over an extended period of time .
