The broad crypto space took a bit of a breather ahead of this month’s CPI report, seeing all 11 coins in the Nasdaq Crypto Index ([NCI]) land in the red as of yesterday’s action.
The broad crypto space took a bit of a breather ahead of this month’s CPI report, seeing all 11 coins in the Nasdaq Crypto Index (NCI) land in the red as of yesterday’s action. While no one piece of data (especially in a volatile and highly speculative area like crypto) gives a full picture as to what an investor should expect, the crypto market mirrors the equity space in the fact that a slowdown in inflation is undoubtedly a positive for the industry. Bitcoin ($BTC) has gained an average of nearly 5% in the following month when headline MoM inflation came in at or below expectations over the last year, versus 3.05% when the reading came in hot. While the difference isn’t quite drastic enough to write home about and many other factors warrant consideration when judging the correlation between collected data, it is a net positive to see inflation falling across the board.
Besides that, it was a relatively muted week in comparison to the last few months for the space. Larger coins, headed by Bitcoin and Ethereum, fell the least. This continues a strong theme that has been discussed in detail over the last few months in which these household crypto names have fared better than their smaller counterparts. The broad pullback for the space does bring many coins back towards the middle of their trading band, which could offer another opportunity to enter into positions if desired. Another “secondary” indicator that is painting a compelling picture for many is the recent flip to positive weekly momentum for the space. As seen in the chart below, no coin within the NCI displays higher than four weeks of weekly positive momentum, with many having recently just flipped. Ethereum ($ETH) fits the bill as a large coin, on consecutive buy signals in actionable territory and just flipped back to positive weekly momentum that could be considered today.
