Crypto Market Sees Little Change Amidst Inflation Data and Market Sentiment
The cryptocurrency market remained relatively stagnant on Wednesday, with Bitcoin and Ethereum experiencing minor fluctuations following the release of higher-than-expected core inflation data. This data weighed on investor decisions, leading to a brief dip in Bitcoin's price below $56,000 before a swift recovery. Despite the recovery, Bitcoin still closed the week down 0.47% and 1.89% since the beginning of September. Ethereum followed a similar pattern, recovering from morning losses to hover around the $2,300 mark.
The overall market sentiment remained cautious, with the Cryptocurrency Fear & Greed Index falling to 31, indicating significant fear, uncertainty, and doubt (FUD) among investors. This cautious sentiment was reflected in the total cryptocurrency liquidations, which exceeded $125 million in the past 24 hours, primarily affecting bullish long positions.
Despite the market's overall stagnation, analysts remain optimistic about Bitcoin's long-term potential. Co-founders of the blockchain analytics platform Glassnode, Jan Happel and Yann Allemanna, noted the peak of the Bitcoin Risk Index, suggesting a favorable time for accumulating Bitcoin.
Stock Market Shows Modest Gains
In contrast to the cryptocurrency market, the stock market experienced modest gains on Wednesday. The S&P 500 rose 1.07%, the Nasdaq Composite added 2.17%, and the Dow Jones Industrial Average gained 0.31%. This upward trend marked the third consecutive day of gains for both the S&P 500 and the Nasdaq Composite.
The stock market's positive performance came despite the higher-than-expected inflation data. Investors now anticipate an 85% chance of a 25-basis-point rate cut, according to the CME FedWatch tool. The next key economic indicator to watch is the producer price index data, scheduled for release on Thursday.