Bitcoin Holds $24K As US Dollar Hits 3-Week Lows In Euro-Zone Inflation Report

Bitcoin (BTC) tried to pin $24,000 as a support ahead of Wall Street’s opening on July 29, as new inflation data sparked concerns for the euro.

Eurozone inflation estimate shows no peak

Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD maintained most of its latest gains after rising to nearly $24,500 overnight.

That day’s macro action delivered painful news for the European Economic Area (EEA), as the latest euro inflation estimates for July came in at 8.9% – still up from 8.6% in June.

Looking at the main components of inflation in the euro area, energy is expected to have the highest annual rate in July (39.7%, compared to 42.0% in June), followed by food, alcohol and tobacco. (9.8%, compared to 8.9% in June), non-energy industrial goods (4.5%, compared to 4.3% in June) and services (3.7%, compared to 3 .4% in June),’ according to an accompanying report prepared by Eurostat.

The data provided a curious contrast in some EU Member States, where growth exceeded expectations despite the highest inflation rates in the euro’s history. This led some commentators to suspect that not all was as it seemed.

800 billion euro spending fund hung about sad reality. https://t.co/31m7ZviKtb

— Tamay Ozgokmen (@TOzgokmen) July 29, 2022

The European dilemma nevertheless supported the US dollar, which until July withdrew from the last two decades against a basket of trading partner currencies.

The US dollar index (DXY) reached 105.54 on the day, its lowest level since July 5, before returning to nearly 106 at the time of writing.

An important inverse correlation for crypto markets, additional DXY advances could indicate new pressures on BTC’s price action.

“DXY just dropped to the previous high that is now supported and appears to be holding. A possible bounce here to 107, 108 before falling further,” popular trading account Mikybull Crypto predicted in a new Twitter update, adding that this scenario would lead to a drop to $22,800 for BTC/USD.

—-

In an arguably unexpected bullish turn, Arthur Hayes, ex-CEO of derivatives platform BitMEX, suggested that a weaker dollar was now imminent.

Related: Bitcoin bull run gets ‘interesting’ as BTC price hits 6-week high

Following the Federal Reserve’s latest policy rate hike, Hayes said the central bank’s return to accommodative monetary policy and more neutral rates had now begun.

Fed Chair Jerome Powell, he wrote on July 28, would no longer raise the hikes, something he called the “Powell pivot.”

The Powell Pivot is here, my body is ready and so is my portfolio. pic.twitter.com/hlI8lzqLcX

— Arthur Hayes (@CryptoHayes) July 28, 2022

The theory, Cointelegraph reported, centers around that the Fed has little wiggle room thanks to rate hikes that increase the likelihood of a deeper recession in the US economy.

The latest GDP data released this week had already plunged the US into a technical recession thanks to two consecutive quarters of negative numbers.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move carries risks, you should do your own research when making a decision.