Could Declining ECI Spark a Bitcoin Rally? – Blockchain news, opinion, TV and jobs

By Marcus Soterio, analyst A publicly listed digital asset broker GlobalBlock (TSXV: Block).

Bitcoin found resistance at the 100 daily moving average yesterday and returned to $20,000. As previously mentioned in yesterday’s commentary, the strong economic data, combined with weak earnings for big tech companies like Amazon, led to a decline in crypto last night.

However, Bitcoin is gathering today after receiving the employment price index (ECI) which came as expected by 1.2%. This number continues the downward trend in the ECI. However, if we look at the ECI chart relative to what it has been for the last 12-14 years, it is three times higher than the average of around 0.4. This means that the Federal Reserve is in no danger of reversing its aggressive policy just yet.

Therefore, in Come November 2nd, the next FOMC meeting, we can’t wait to see Federal Reserve Chairman Jerome Powell discuss the looming crisis on the horizon. Although, there has been a downward trend over the past few months, so we could hear talk of 50 basis point increases rather than 75 basis points.

However, the question is where the interest rate will go as the federal funds rate rises.

The world’s largest bitcoin miner, Core Scientific, is now going bankrupt. This is because Bitcoin trading has been below its production cost for so long that many miners have not been able to sustain themselves. This could force miners to switch to cheaper renewable energy, as Aspen Creek Digital Corp has cleverly done. A six-megawatt solar facility has begun mining in western Colorado. We can expect more Bitcoin miners to follow suit this way, especially if stricter regulation comes with the power consumption of Bitcoin miners.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *