The slowdown in US inflation has stalled. Bitcoin showed volatility
October 13th, 2023

The slowdown in US inflation, which had shown some signs of deceleration in the previous months, seems to have stalled. In September, consumer price growth in the United States remained at 3.7% on an annual basis, the same as the previous month and slightly higher than the expected rate of 3.6%. This unexpected pause in the deceleration of inflation had implications for financial markets, including the cryptocurrency space, as Bitcoin exhibited volatile price movements.

On a monthly basis, US prices increased by 0.4%, which was slightly below economists' expectations of 0.3%. It also marked a moderation compared to the 0.6% growth seen in the previous month.

The growth in core inflation, which excludes volatile components like food and energy prices, stood at 4.1% on an annual basis and 0.3% on a monthly basis. These figures were slightly lower than the prior month's 4.3% annual rate and equal monthly growth.

Bitcoin, the leading cryptocurrency, initially showed mixed price fluctuations around $26,800 following the inflation data release. However, it later experienced a decline in value. The digital asset displayed daily losses that reached 1.4% as the market reacted to the inflation figures. A similar trend was observed in Ethereum, the second-largest cryptocurrency by market capitalization, as its prices fluctuated around $1,550 and then dipped to new local lows.

Overall, these changes in the cryptocurrency market are indicative of the broader financial market's sensitivity to economic data and inflation figures. While cryptocurrencies like Bitcoin have gained popularity as potential hedges against inflation, they are also influenced by various market factors, including macroeconomic indicators.

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