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Bitcoin jumps to $ 49,000 amid inflation fears

Bitcoin (BTC) rose bit by bit on September 18 as the focus turned to the Federal Open Market Committee (FOMC) policy meeting in the wake of lower inflation figures last Tuesday.

The exchange rate of the BTC / USD pair approached $ 49,000 on the Coinbase exchange, reaching $ 48,825 before dipping into tentative profit-taking sentiment. Nonetheless, the uphill move raised expectations that the pair would hit $ 50,000, a target of psychological resistance, in the coming sessions.

Inflationary fears drive demand for Bitcoin

Bitcoin markets received a boost from fears of persistently higher inflation, despite a calming consumer price index (CPI) report released on September 13.

The data showed that the US CPI increased 5.3% year-on-year in August, compared with 5.4% in the previous month. The market received mixed reactions to these numbers, some cheered that core inflation was lower than expected, while other they pointed out that inflation was still at ridiculously high levels, 5.3% being one of the highest numbers in more than a decade for the CPI.

“I like to see inflation data in a median sense (so instead of having one crazy category that drives everything, we look at the center of the distribution, in 82 categories, equally weighted)”said Jens Nordvig, founder of data analytics firm Exante Data. He added:

“In the metric [mediana], the number [de inflación] it wasn’t low. “

The New York Federal Reserve now forecasts inflation of 5.2% in one year, 4% in three years; a high series with “large expected price increases” in food, rent and medical costs.

More bullish signals appeared for Bitcoin as analysts at TD Securities noted that the Federal Reserve could delay the planned reduction of its monthly asset purchase policy of $ 120 billion after the softer-than-expected inflation report.

Additionally, Anthony “Pomp” Pompliano, a partner at Pomp Investments, warned that sustained 5% inflation would cause Americans to see their savings evaporate.

“The only way to protect yourself in this environment is to make sure you invest,” Pomp said in a note to clients.

“The more you invest in the markets, regardless of whether it’s stocks, real estate, cryptocurrencies, etc., the better off you’ll be.”

The dollar rises with par

As it happened, the exchange rate of the BTC / USD pair jumped 4.85% on the day of the publication of the inflation data.

The pair rose another 2.17% on Wednesday, and its prices closed above $ 48,000. Their prices began to consolidate sideways in the next two sessions, only to move further towards $ 49,000 on Saturday.

Surprisingly, The US Dollar Index (DXY) also moved higher like Bitcoin, reiterating that macro investors switched capital to assets that they considered their safe haven after the inflation report. The index, which measures the dollar against a basket of major foreign currencies, rose 0.41% on Friday to 93,246, its highest level in September.

Bitcoin and the US Dollar Index rise on mixed inflation outlook. Source: TradingView.com

More clues for Bitcoin and the dollar markets should be expected from next week’s FOMC meeting.

Fed officials agree that they would begin to undo their loose monetary policies later this year. But the Non-Farm Payroll (NFP) report earlier this month showed that the US job market had not fully recovered.

That would lead the Fed to stick with its phasing out plans, and any further delay could imply both the strength of Bitcoin and the weakness of the dollar.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Each investment and commercial movement involves a risk, you must do your own research when making a decision.

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Tammy Sewell is our Writer and Social at OICanadian.com. Tammy loves sports, she writes our celebrities news. She spends time browsing through several celebs news sources as well the Instagram. Email: Tammy@oicanadian.com Phone: +1 513-209-1700

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