Crypto Focus: USD and USD Inflation Causing Despair for Buyers
Another lower week with a surging USD and US inflation still the leading cause of despair for buyers.
The week started well enough, with buyers grinding out a weekend session that saw decent gains into Monday’s session. That all changed on Tuesday after the latest US CPI data showed a surprise increase to the upside. Once again, the story continued, higher than expected inflation worries fueled the USD and continued to inflate rate hike worries.
As we have seen on a few occasions this month, that was enough to derail a positive start to the week and send most coins sharply lower. The CRYPO25 index is trading close to 10% lower at this stage in the week.
The long-awaited Ethereum merge went through this week, and the hype could have been a little overdone. In the last two weeks, ETHUSD added 17% up to this week’s merge, but with the influences mentioned above price wasn’t spared from the heavy selling. Price currently sits just over 15% lower.
A few larger coins are still sitting at or above support points. This could be tested in the week to come with the FOMC on Thursday (AEST). Rates are expected to be increased to 3.25%. It’s what in the statement that could set the tone for the USD and how the Fed currently see the inflation situation.
This could have a knock-on effect on crypto markets, and as we see in the chart below, the weekly top 25 is starting to close back in on a strategic support point after forming a new LH and maintaining the break of the recovery trend. We would like to see this level hold to show buyer strength, and a break below could set up a new move back to June / July lows.
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