Cryptocurrencies edge higher as markets digest US CPI print

Cryptocurrency prices edged higher on Tuesday as markets began to digest the US CPI data. US CPI data on Tuesday showed that price pressures remain high and are not easing at the anticipated pace. US headline inflation in January dropped to 6.4% year-on-year versus the 6.2% expected. January’s CPI print illustrates the danger of inflation becoming entrenched, which may force the Fed to rethink its recent dovish pivot. 

The Federal Reserve raised interest rates by only 25 basis points at its February meeting, bringing the benchmark interest rate to a target range of 4.50% to 4.75%. Current market odds lean towards further tightening in the upcoming Fed meetings and an increase in interest rates up to 5.25%. 

Prolonged rate hikes fuel global recession concerns, driving risk assets down. As inflation starts to cool though, central banks are starting to lower the pace of rate hikes, which may revive risk sentiment.

The bitcoin price rose to the $22,300 level on Tuesday. If the BTC price declines, support can be found near $20,450, while further resistance may be encountered near $23,400. 

Ethereum price also rose on Tuesday, touching the $1,560 level support. If Ethereum's price declines, it may encounter support near $1,462, while if it increases, resistance may be encountered near $1,715.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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