- Almost immediately after the CPI (consumer price index) report, DXY fell sharply to 98.225
- The Core Consumer Price Index (Core CPI), which excludes food and energy sectors, rose to 3.1% on a year-over-year basis
- Ethereum only needs 10% more value to reach the new all-time high
The US Dollar Index (DXY) has fallen significantly this year, down about 10 points. This marks its sharpest six-month drop since 1991, which is often good news for Bitcoin and other cryptocurrencies since digital assets usually serve as a hedge against dollar depreciation.
Today, DXY held steady near 98.5 ahead of key US CPI data and a looming US-China tariff deadline. However, almost immediately after the CPI (consumer price index) report, DXY fell sharply to 98.225.
Speaking of the CPI report, it shows that headline CPI for July came in at +2.7% year-over-year, matching June but slightly below the expected 2.8%. However, the core CPI, which excludes food and energy sectors, rose to 3.1% on a year-over-year basis. This figure surpassed both the 2.9% recorded in June and market expectations, indicating that inflationary pressures are persistent.
Related: July CPI Comes in Cool at 2.7%: What This Means for the Price of Bitcoin
The dollar index falling could provide further tailwinds for crypto and equities alike. Yet, while the current sentiment for cryptos is bullish, high inflation can often drive investors toward safe-haven assets like US Treasuries.
That said, the S&P 500 or SPX (an index that tracks how well the stocks of 500 major companies in the US are performing) is climbing, thanks to central banks around the world lowering interest rates and expanding the money supply. With the Fed likely to follow suit, equities are benefiting from increasingly dovish monetary conditions.
Bitcoin and Ethereum got a boost
Following the CPI news, major cryptocurrencies such as Bitcoin and Ethereum showed a positive momentum. Though falling almost below $118k, Bitcoin is now climbing and is hovering around $119.5k.
Ethereum is doing even better, going over $4,400. It needs only about 10% more value to reach a new all-time high. This might not be a surprise considering that ETH has seen massive institutional uptake. Public entities like BitMine and SharpLink Gaming have acquired nearly 2 million ETH since June.
The derivatives angle. This spot rally is having a huge impact on the futures market. Here’s our news report on the record open interest in Ethereum.
Ethereum’s daily transactions reached a record 1.74 million, eclipsing 2021 bull run peaks. What’s more, active user counts, DEX volume, and stablecoin supply are all on the rise as well.
As a result, a lot of users are very optimistic now that ETH will likely reach its highest-ever level by the end of this year.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
