On Wednesday, August 10, the U.S. Bureau of Labor and Statistics reported inflation of 8.5% for July 2022. The equity and crypto markets celebrated the fact that the inflation numbers were lower than the expected 8.7%.
Soon after this news, bitcoin and other crypto-currencies soared. The price of BTC surpassed $24,000. BTC is trading up 6.56% at a price of $24,477 with a market capitalization of $466 billion. On the other hand, altcoins saw an even bigger jump, with Ethereum and all other top 10 altcoins gaining between 10 and 15% in the last 24 hours. Ether, has gained over 12% and is currently trading at nearly $1,900.
The downward trend in the inflation number shows that the Federal Reserve’s interest rate hikes are playing their part. This could mean that the Fed may take a less hawkish stance. bellicose in the coming months. That could mean money could start flowing back into risky assets like stocks and crypto.
A few days ago, Elon Musk already stated that the peak inflation period is behind us. He said that prices will stabilize over the next six months. However, Musk expects slight inflation over the next 12 to 18 months. Speaking to The Block, Matt Weller, head of research at Forex.com, said:
Today’s “weaker-than-expected inflation report could help reduce the headwind of rising U.S. interest rates for Ethereum and other crypto assets.” He also adds that the Fed will want to see a “sustained trend of lower inflation before even considering a pivot to interest rate cuts.”
Ethereum whale accumulation and meltdown update amid inflation news.
Ethereum, has seen a strong move over the past month. Over the past 30 days, ETH has gained over 80% amidst all the positive developments surrounding the merger update.
In addition, blockchain data provider Santiment reported that ETH trades worth $1,000 or more have increased significantly. This is in line with a strong accumulation of whales.
🐳 #Ethereum surged back over $1,880 after a positive #CPI report Wednesday. This 2-month high in price came with a major influx of $ETH transactions valued at $100,000 or more. This is happening in tandem with whale addresses appearing to be accumulating. https://t.co/1Wlpp7qlFh pic.twitter.com/HuEJPScD40
– Santiment (@santimentfeed) August 11, 2022
On the other hand, Ethereum developers successfully implemented the Merge upgrade on the Goerli test network on Wednesday. This was the final dress rehearsal before the Merge upgrade on the Ethereum mainnet on September 19.
The Goerli testnet is simulating a process identical to the Merge upgrade on the Ethereum mainnet that will take place next month. Tim Beiko, the Ethereum protocol developer coordinator, said they will observe the performance of the testnet within hours of the upgrade.
“We want to see the network finalized and have a high participation rate among validators and also make sure we don’t run into any unexpected bugs or problems“, said Beiko.