The global cryptocurrency market remained relatively steady following today’s largely-anticipated release of U.S. inflation data. According to the United States Bureau of Labor Statistics, the Consumer Price Index (CPI) rose 6.5% in December, the lowest since October 2021.
The 6.5% increase is a 0.1% decline from the November CPI figure and represented a step in the right direction for ongoing efforts by the U.S. Federal Reserve to curb inflation. Notably, the reported 6.5% increase exceeded analysts’ expectations of a 6.6% rise.
The U.S. Bureau of Labor Statistics data revealed that the index for gasoline was the biggest contributor to the CPI decline. The gasoline index dropped by 1.5%, offsetting increases in the rising cost of shelter. Although the food and energy indexes rose by 10.4% and 7.3% in the past year, these increases were smaller compared to the 12-month period ending November 2022.
Crypto Market to Profit from Declining Inflation
Declining inflation is largely positive for risk-on assets like cryptocurrencies, hence the relatively stable market performance in the wake of today’s CPI release. The chart below reveals that the crypto market has recovered to mid-December levels.
A solid move above the current resistance level could lead to more gains and continue a positive start to the year for crypto assets. The current market capitalization is nearly $850 billion, representing a $100 billion increase on the year-to-date (YTD) chart.
Bitcoin continues to trade above its newly-found territory above $18,000. The leading cryptocurrency has gone up by 8% in the past seven days, a performance that mirrors most large-cap cryptocurrencies over the same period.
