How the rising trend in CPI will affect Bitcoin price in short to medium term?

death69

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Quote from: RealMalatesta on May 04, 2023, 12:53:23 PM

Quote from: Sayeds56 on April 04, 2023, 04:40:25 AM

Quote from: adaseb on February 18, 2023, 11:39:40 PM

Well in the past Bitcoin followed what the nasdaq index typically did. When the nasdaq went up, so did Bitcoin. And the same was true when it went down.

So if the CPI Is high it means higher fed rates and lower stock prices and hence Bitcoin should go lower which it did. However for the past few days Bitcoin hasn’t been correlated as closely. Basically Bitcoin went up and stocks went down.

But if the old trend returns then higher CPI generally means Bitcoin will head lower as stocks head lower.

It appears that correlation between consumer price index (CPI), stock market and Bitcoin is weakening, largely due to successive collapse of Banks in the USA which has resulted in loss of confidence in fiat system among the public. This paradigm shift has created new interest in Bitcoin and led to steady increase in its price above 28,000, and it is likely to surpass 30,000 in coming weeks. This has changed market sentiment from negative to positive and most of participants think that Bitcoin was bottomed out at around $15,000 in 2022 and we may never see that price again in future.

I feel like that is a short term one though, I mean surely it is shifting at this moment I am not arguing against that, but it is also not looking like a big long term thing, it could go right back to being like old self again. We need to see a big break from that level and then be different for a long time before we can be sure about what's going on, otherwise it is not going to really change all that much.

I hope that it will do a lot better and should eventually look like it is going to be a big deal, but for the time being it feels like we are doing a job that is a bit different at the moment and that is not permanent yet, it feels temporary. Or maybe that is just me, and I feel it is temporary and it has already become permanent, only time will tell.

I feel ya, buddy. Predicting the future of any investment is a wild ride, and with Bitcoin's ups and downs, it's even wilder. But I'm all in on the Bitcoin train. Its decentralized vibe, open-book ledger, and limited supply make it a sweet deal for investors seeking a safe spot during shaky times.

Sure, there might be short-term price swings, but I'm betting on Bitcoin's unlimited long-term potential. As more businesses and folks embrace Bitcoin for payments, its value's gonna keep on climbing. So let's not get stuck in the daily price fluctuation. Let's zoom out, focus on the big picture, and get stoked about the game-changing future Bitcoin's got in store for finance.

teosanru

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Quote from: Sayeds56 on February 14, 2023, 09:59:16 AM

The consumer price index(CPI) data released today , fell short of market expectation and it is showing sign of increasing once again and it may lead to concerns about inflation and potential harsher interest rate increase in future. This is likely to create negative sentiment in all financial markets including Bitcoin.Hopefully, FED will take necessary action to curb this increasing trend.

Despite this, I believe that its impact is expected to be temporary, and that Bitcoin's price will eventually recover over time, and market will continue moving upwards.

What are your thoughts on this?

CPI generally and economically should have a positive impact on Bitcoin and Cryptos. CPI indicted weakness in the Fiat currency market which should ideally mean the USD value is weakening and therefore should translate into strong crypto momentum. Can anyone help me with how can CPI effect bitcoin negatively?

RealMalatesta

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Quote from: Sayeds56 on April 04, 2023, 04:40:25 AM

Quote from: adaseb on February 18, 2023, 11:39:40 PM

Well in the past Bitcoin followed what the nasdaq index typically did. When the nasdaq went up, so did Bitcoin. And the same was true when it went down.

So if the CPI Is high it means higher fed rates and lower stock prices and hence Bitcoin should go lower which it did. However for the past few days Bitcoin hasn’t been correlated as closely. Basically Bitcoin went up and stocks went down.

But if the old trend returns then higher CPI generally means Bitcoin will head lower as stocks head lower.

It appears that correlation between consumer price index (CPI), stock market and Bitcoin is weakening, largely due to successive collapse of Banks in the USA which has resulted in loss of confidence in fiat system among the public. This paradigm shift has created new interest in Bitcoin and led to steady increase in its price above 28,000, and it is likely to surpass 30,000 in coming weeks. This has changed market sentiment from negative to positive and most of participants think that Bitcoin was bottomed out at around $15,000 in 2022 and we may never see that price again in future.

I feel like that is a short term one though, I mean surely it is shifting at this moment I am not arguing against that, but it is also not looking like a big long term thing, it could go right back to being like old self again. We need to see a big break from that level and then be different for a long time before we can be sure about what's going on, otherwise it is not going to really change all that much.

I hope that it will do a lot better and should eventually look like it is going to be a big deal, but for the time being it feels like we are doing a job that is a bit different at the moment and that is not permanent yet, it feels temporary. Or maybe that is just me, and I feel it is temporary and it has already become permanent, only time will tell.

FUCKBSVFUCK

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The rise in CPI is a good sign for the crypto market. It has been in the news for a long time and it is not surprising that we are seeing a lot of people buying and hodling their coins for a long time.

However, it is important to note that there is no correlation between the price of Bitcoin and the CPI.

Sayeds56

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Quote from: adaseb on February 18, 2023, 11:39:40 PM

Well in the past Bitcoin followed what the nasdaq index typically did. When the nasdaq went up, so did Bitcoin. And the same was true when it went down.

So if the CPI Is high it means higher fed rates and lower stock prices and hence Bitcoin should go lower which it did. However for the past few days Bitcoin hasn’t been correlated as closely. Basically Bitcoin went up and stocks went down.

But if the old trend returns then higher CPI generally means Bitcoin will head lower as stocks head lower.

It appears that correlation between consumer price index (CPI), stock market and Bitcoin is weakening, largely due to successive collapse of Banks in the USA which has resulted in loss of confidence in fiat system among the public. This paradigm shift has created new interest in Bitcoin and led to steady increase in its price above 28,000, and it is likely to surpass 30,000 in coming weeks. This has changed market sentiment from negative to positive and most of participants think that Bitcoin was bottomed out at around $15,000 in 2022 and we may never see that price again in future.

adaseb

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Well in the past Bitcoin followed what the nasdaq index typically did. When the nasdaq went up, so did Bitcoin. And the same was true when it went down.

So if the CPI Is high it means higher fed rates and lower stock prices and hence Bitcoin should go lower which it did. However for the past few days Bitcoin hasn’t been correlated as closely. Basically Bitcoin went up and stocks went down.

But if the old trend returns then higher CPI generally means Bitcoin will head lower as stocks head lower.

yhiaali3

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I see that the majority are optimistic about the short-lived negative impact of CPI on the crypto market, especially Bitcoin. This reflects people's increasing confidence in Bitcoin as the most important asset for a hedge against inflation.

As inflation continues and people tend to buy bitcoin to preserve the value of their money, the effect of CPI will fade in the near future, and we can see the exact opposite with the increase in the positive effect of people tending to buy more bitcoin.

Edwardard

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This was the first time where CPI (Consumer price index) data came in higher than ppl's expectations and the bitcoin market still went up, despite the us30 going downwards. Personally, Im very excited to see the price action in the upcoming months. I believe slowly we can stop reacting to these CPI data very soon either bullish or bearish. The crypto market is learning to adapt to the change and survive just like it did in the past years.

electronicash

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so many hypotheses about how BTC price is affected by macro news relating to CPI and raising interest rates but it's often seen that it's all related to crypto factors like the adoption. but its definitely been observed the price was greatly affected when the interest rate is raised either high or low and so the reason we are very anxious about the next FED statement, particularly inflation, and unemployment stats. these two are the basis of money creation.

its economy is based on debt so the more money is created, the BTC price will also be positively affected.

Mauser

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Quote from: Sayeds56 on February 14, 2023, 09:59:16 AM

Despite this, I believe that its impact is expected to be temporary, and that Bitcoin's price will eventually recover over time, and market will continue moving upwards.

What are your thoughts on this?

The bitcoin price looks already pretty strong compared to the levels at the start of the year around 16-17,000 USD. In terms of inflation not much changed over the last 6 months, the central banks kept increasing the interest rates but prices are keep rising. Overall I think that a higher inflation is also going to lead to a higher bitcoin price. In the short term however investors are spooked and will be selling all types of risky assets including crypto currencies. Higher interest rates by the central banks will make all fixed income products more attractive, so that is what most investors are going to switch into. The problem is that even the high yield bonds are not going to yield returns as high as the inflation rate. So for investors to not lose value long term they have to come back to the crypto market.

beerlover

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Quote from: dansus021 on February 16, 2023, 08:22:49 PM

To be honest, I hate looking at the economic calendar but like it or not that is their job as ex-forex traders CPI is always the moment of stress every decision they make "always" makes a market shake.

and that has come to bitcoin too after larger institution joined crypto industry is good that crypto gaining more people but news like "CPI" is the side effect Cry

I agree that these type of charts and the way wall street trades is so beyond me in the crypto world, I do not care about those at all. In crypto things work a little bit more differently and that's why it's not going to be the same thing. First of all, whole thing is connected to each other, secondly we are talking about just bitcoin going up and down could make the whole market go up or down.

This also means if there is one bad news about bitcoin, the whole market will crash and that's not something you can avoid here. When you compare that to stocks where if one stock has bad news, then rest are fine? I would say it's not going to be the same thing to trade the same way.

hugeblack

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I heard a lot of analyzes regarding producer and consumer prices, as producer prices slowed down more than expected, and therefore they may rebound in the next meeting by tightening the policy to 50 basis points or 75 basis points, and thus it will reach 5.2 percent for the next period, with interest rates stabilizing to 5 percent until the end of the end. We saw some negative returns, which are considered good unless changes occur that lead to an increase in prices during the coming period.

dansus021

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To be honest, I hate looking at the economic calendar but like it or not that is their job as ex-forex traders CPI is always the moment of stress every decision they make "always" makes a market shake.

and that has come to bitcoin too after larger institution joined crypto industry is good that crypto gaining more people but news like "CPI" is the side effect Cry

el kaka22

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Basically the value of dollar is going down, because costs are going up, and we all need to make more dollars to live the same life. That is simply called inflation, and it has gone up a lot so far and I am thinking that it may keep going up a bit more, not as fast as it used to but still could go up even more.

That means we need to find a solution to what we have and we should be going up a bit more, and that is going to be a tough situation to be in because while bitcoin prices going up thanks to inflation, the purchasing power may not, and that would mean you would have more dollars in the bank but same amount of things that you can buy with it all the same.

Johnyz

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Quote from: Sayeds56 on February 14, 2023, 09:59:16 AM

Despite this, I believe that its impact is expected to be temporary, and that Bitcoin's price will eventually recover over time, and market will continue moving upwards.

What are your thoughts on this?

Bitcoin is recovering and seems unbothered by this issue. Most of the economy are rising as well though we cannot deny that bigger countries are experiencing a lot of problems economically and with their inflation. Bitcoin might be affected by this but I also believe that its only a temporary trend and the government will always find its way to recover. Long term player will just ignore this new because they believe the market will always rise and they think for the future of Bitcoin and not just with the short term trend.

Husires

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Quote from: Don Pedro Dinero on February 15, 2023, 10:45:04 PM

That's what I thought yesterday, but with bitcoin we shouldn't look at short-term events.

What is the definition of short and medium term? Because in Bitcoin, the definition of the medium term by two to 5 years is considered a long period of time compared to other investments, and the decentralization of Bitcoin will accelerate such tools. It is just a guess because there are many variables that will affect the price in a period of 5 years.

What I am trying to convey here is that these indicators cannot be relied upon in the short term and are not sufficient to bring about changes in the long term. Therefore, on their own, they are indicators of no value.

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Quote from: Don Pedro Dinero on February 15, 2023, 10:45:04 PM

That's what I thought yesterday, but with bitcoin we shouldn't look at short-term events. In theory it is a good hedge against inflation, if not the best, but apparently in the period of the highest inflation since its creation it has not been a good hedge against inflation because the price has fallen. I say apparently because if we look deeper we see that everything has gone down, which is normal due to the reduction policy of the central banks that have withdrawn money from circulation, and in general all markets have gone down.

What people often do not realise is that inflation as a CPI does not count the price of financial assets, and that in times of monetary expansion, inflation ends up in them. We only have to look at the returns since its inception to realise that expansionary policies have worked very well for it and I think it will continue to do so. Investors are betting that inflation will moderate, as it seems to be doing, and then Central Banks will slow down or even change rate policy, making markets rise again.

If you are into short or mid-term then why not? But for those who do long-term investing, then they can just neglect these because the flow of the price can still change later on. Bitcoin is definitely the best hedge against inflation because of it's deflationary characteristics. It's supply is very small and limited and then it halves every four years making the coin more scarce from time to time.

It's normal for Bitcoins value to go down because it was still a highly volatile coin but we shouldn't worry because its price can always recover no matter how low it dips. Other factors or mostly the happenings outside can also affect how it's value moves.

Sayeds56

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Quote from: Don Pedro Dinero on February 15, 2023, 10:45:04 PM

What people often do not realise is that inflation as a CPI does not count the price of financial assets, and that in times of monetary expansion, inflation ends up in them. We only have to look at the returns since its inception to realise that expansionary policies have worked very well for it and I think it will continue to do so. Investors are betting that inflation will moderate, as it seems to be doing, and then Central Banks will slow down or even change rate policy, making markets rise again.

You bring up very interesting point regarding Bitcoin as a hedge against inflation. It is theatrically correct that due to its finite supply & decentralized nature, it should work as a good hedge against inflation. However, as you noted, short term fluctuation in Bitcoin price is not always correlated with inflation rate. It is also true that inflation measured by CPI doesn't necessarily reflect its impact on financial assets including Bitcoin. Inflation can lead to increase in price of assets as investors look for alternative stores of value to protect their purchasing power.

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Quote from: Husires on February 15, 2023, 04:18:21 PM

It seems that the opposite is what happened, we witnessed strong rises in the price, which is an opposite sign of what you had expected.
Am I the only one who sees that these things are not interconnected, and when any correlation occurs, it is just a coincidence?
the price is still within the normal frequency range, which means that we can easily go back to the bottom of this area between 21k-24k.

That's what I thought yesterday, but with bitcoin we shouldn't look at short-term events. In theory it is a good hedge against inflation, if not the best, but apparently in the period of the highest inflation since its creation it has not been a good hedge against inflation because the price has fallen. I say apparently because if we look deeper we see that everything has gone down, which is normal due to the reduction policy of the central banks that have withdrawn money from circulation, and in general all markets have gone down.

What people often do not realise is that inflation as a CPI does not count the price of financial assets, and that in times of monetary expansion, inflation ends up in them. We only have to look at the returns since its inception to realise that expansionary policies have worked very well for it and I think it will continue to do so. Investors are betting that inflation will moderate, as it seems to be doing, and then Central Banks will slow down or even change rate policy, making markets rise again.

SquirrelJulietGarden

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Quote from: Sayeds56 on February 14, 2023, 09:59:16 AM

The consumer price index(CPI) data released today
[...]
Despite this, I believe that its impact is expected to be temporary, and that Bitcoin's price will eventually recover over time, and market will continue moving upwards.

Do you think it is too late to discuss about that?

Pandemic and consequent QEs from central banks especially the USA. central banks put the world in very inflationary time. CPI and interest rate are affected a lot in the past year 2022 and now in 2023, it is a considering time for FED to slow down their speed of increasing interest rate. CPI is an indicator that reflects economic and social status and if interest rate becomes better in future, we will see better CPI.

I believe that we will get better interest rate and CPI in 2023 that is positive support for financial markets as well as cryptocurrency market including Bitcoin.

FED did not increase interest rate instantly and sharply and I believe they will have similar style when reduce interest rate.

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