- The United States’ long-term rating was reduced from AAA to AA+ by credit rating firm Fitch Ratings.
- The US Treasury also stated last week that it will need to issue over $1 trillion in debt in the current quarter to fund government operations.
- The price of a Bitcoin has been stable at roughly USD 29,500.
- The bulls were successful in maintaining Ethereum above $1,800 but they are failing to initiate an extended rally.
- Crypto appears to have been unaffected by these macro market developments.
- The cryptocurrency markets are trading in a range ahead of the release of US CPI data later today.
Bitcoin (BTC) bulls hope the Bureau of Labour Statistics’ July Consumer Price Index release on Thursday morning will show ongoing U.S. inflation improvement. Like June, economists forecast a 0.2% monthly gain. From 3% in June, 3.3% year-over-year growth is expected. In June 2022, headline inflation reached 9.1%, while in July last year, it was 8.5%. July’s core CPI is forecast to match June’s 0.2%. Annual core CPI is predicted to drop to 4.7% from 4.8%. Core CPI reached 6.5% in March 2022 and 5.9% in July 2021.
The Fed’s slowing and possible end of tightening may have contributed to bitcoin’s slight comeback. Despite Thursday’s low CPI, short-term interest rate traders expect no Fed rate hikes this year. According to CME Group estimates for next year, traders expect rate decreases from the U.S. central bank as early as February.
The United States credit rating has dropped:
The United States’ long-term rating was recently lowered by the credit rating firm Fitch Ratings from AAA to AA+. The organisation offers unbiased evaluations of the world’s nations, corporations, and corporate entities’ creditworthiness and ability to repay debt. The top grade a country may receive is AAA, with AA+ being the next level below.
Investor trust in the US’s ability to manage its finances has reportedly declined as a result of the recent debt-ceiling mess and its hurried resolution, according to Fitch.
This development is significant because it may reflect how much US government bonds this investor type wishes to hold over the long term. Large-scale institutional investors, such as pension funds, endowments, sovereign wealth funds, etc., rely on credit ratings when allocating capital across fixed-income markets.
Bitcoin Price Analysis:
Bitcoin’s price is being pushed between $29,000-$30,000 and the horizontal support at $28,500. This low-volatility era is expected to be followed by an increase in volatility. If the price rises and breaks above $29,900, the bulls have beaten the bears. This might spark a rally to the overhead resistance zone between $31,000 and $32,000. If the price falls and remains below $28,300, it indicates that the uncertainty is resolved in favor of the bears. The BTC/USDT pair may then begin to fall to $27,000.
Concluding Thoughts:
Over the past few days, Bitcoin’s price has been hovering close to the $29,500 mark in trade. This would imply that there is not a strong demand at higher levels, but the only consolation that the bulls can take from this is that they have been successful in keeping the price above the immediate support. Short-term traders may have been enticed to lock in profits due to the lack of clarity over the next potential direction of movement. Even while the price action in the short term has not been very encouraging, crypto bulls continue to be optimistic that Bitcoin will stage a rally before its second halving in 2024.
