The US released positive consumer inflation data on Thursday, leading to a brief increase in Bitcoin prices followed by a sharp decline. Bitcoin peaked at $59,300 before falling back to around $57,000. Other cryptocurrencies like Ether, Solana, and Avalanche experienced similar price movements.
Meanwhile, gold approached its all-time high and popular exchange-traded funds (ETFs) such as Invesco QQQ (QQQ), Schwab US Dividend Equity (SCHD), and SPDR S&P 500 (SPY) saw gains of over 1%.
The US data showed a slight decrease in headline and core inflation for June. Headline CPI dropped from 3.3% to 3.0% while core CPI, excluding volatile food and energy prices, fell to 3.2%. These numbers were favorable for assets like Bitcoin, stocks, and commodities as they increased the likelihood of the Federal Reserve cutting interest rates as early as September.
Bitcoin has diverged from ETFs like QQQ, SPY, and SCHD for several reasons. Firstly, the German government selling coins on exchanges has added supply to an already illiquid asset, causing price dislocation. Additionally, Bitcoin miners’ capitulation has contributed to this trend.
As the US earnings season approaches, funds like QQQ, SPY, and SCHD have risen in anticipation of strong performances from companies like JPMorgan, Wells Fargo, and Citigroup. Analysts predict significant earnings growth, with the estimated earnings growth being the highest in over 4 years.
Analysts are optimistic about US equities this year, with most raising their forecasts for the S&P 500 index. However, concerns remain about Bitcoin’s double-top chart pattern and bearish indicators like dropping below the 200-day moving average and forming a rising wedge pattern. Oscillators like the Relative Strength Index (RSI) and MACD also show bearish signals, indicating potential further downside for Bitcoin.