TL;DR
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After April’s CPI data came in at 3.4% (lower than March’s 3.5%), market players went ‘risk on,’ adding $300B to the total crypto market cap in a matter of hours.
Full Story
We were about to open this article with something along the lines of:
“The market just shot straight up, yet somehow, the search term ‘whiplash’ didn’t peak on Google trends? We’re just as surprised as you.”
But in a strange turn of events, that makes us question whether or not we’re living in a computer simulation: it did peak 👆
And it makes sense.
On Tuesday, just about all major crypto charts were telling us to prepare for a continuation of “choppy-droppy-price-action” (👈 that’s the technical term) which we’ve been experiencing for the past month or two…
Then BAM! $300B was added to the total crypto market cap in a matter of hours.
Here’s what did it:
April’s Consumer Price Index (CPI) data was released (aka: “how much more expensive have everyday items become in the past year” data), and it went down from 3.5% in March to 3.4% in April.
And for every month the CPI data lowers → the closer we get to interest rate cuts → the less we pay on loans and credit repayments → the more money we all have to spend → the healthier the economy becomes.
(That’s the idea at least).
And in an attempt to front run this (potential) incoming economic uptick, market players started pumping money into riskier assets, like crypto (which tends to thrive in low interest rate environments).
This doesn’t mean we’re back in ‘up only’ mode…but it’s a start!
We love to see it.
