Cryptocurrency hedge fund manager Thomas Kralow said that since raising the debt ceiling, we have seen the federal debt surge by $1 trillion in just five weeks.
The rapid increase in debt has had a major impact on the market. As more money is pumped into the system, the purchasing power of fiat currencies can weaken.
That could prompt investors to turn to alternative assets such as cryptocurrencies, including bitcoin BTC -0.17%, as a hedge against inflation.
Today’s CPI (Consumer Price Index) report is significant. The recent drop in CPI from 5% to 4% is encouraging and a drop to 3.1% would suggest that the Fed may be nearing the end of its tightening cycle. This could indicate a more controlled inflationary environment and support positive sentiment in the cryptocurrency market.
Lower inflation could boost confidence in cryptocurrencies as a store of value and a hedge against traditional fiat currencies.
While short-term forecasts are challenging, a breakout to the upside is still possible, especially as long as support around $29,830 (or $30,000) holds. The breakout target is around $33,000, with the top level of the move around $36,500.
