After the declines in the last 24 hours, the crypto market has turned red again. Stagnant price action could be the start of another downturn, as many experts are beginning to doubt whether US inflation is peaking.
Bitcoin price, which rose to $24.5 thousand, again fell below $23 thousand. It is currently trading at $22.9k. Ethereum also dropped from $1,764 at the start of the week to as low as $1,570. It has since risen a bit and is trading at $1,624.
Ethereum Classic and Cronos also suffered significant losses.
Inflation Fears Rising
Trivariate’s CEO and founder, Adam Parker, explained in an interview with CNBC that he believes the CPI figures will continue to stay high. The Consumer Price Index is an important indicator used by the Fed to measure inflation. However, many experts believe that this is a lagging indicator that will not relax for a long time.
According to Parker, he did not see anything from the Fed that pointed to pigeon intent.
Chris Toomey of Morgan Stanley also announced that inflation had not peaked yet. He also pointed to th state of global GDP as a cause for concern. According to him, this inflation is now seen as structural rather than temporary.
Impact On Crypto
The rise in inflation can have a severe effect on the crypto price—the Federal Reserve curbs inflation with quantitative tightening and rate hikes. In June, the Fed increased interest rates by 75 basis points, which led to a crypto bloodbath.
Another bad CPI data and an unusually large increase from the Fed could cause the crypto industry to return to a bear market.