A crypto market rally is going on today, February 15, as investors buy the recent dip after the encouraging US consumer inflation report.
Summary
- The crypto market rally restarted today, with Bitcoin and most altcoins rising by double digits.
- This rally ignited after the recent US inflation report, which showed that prices retreated in January.
- The rally is also happening as the Crypto Fear and Greed Index remains in the extreme fear zone.
Bitcoin (BTC) price jumped to $70,000, while the market capitalization of all coins soared to over $2.4 trillion. Pepe Coin (PEPE) jumped by over 30% in the last 24 hours, while Zcash (ZEC), Dogecoin, and Bonk were up by over 10% in the same period.
Most of these tokens have soared by over 50% from their lowest levels this year. Other top gainers were coins like Shiba Inu, Jupiter, Morpho, and Pippin.
Crypto market rally triggered by US inflation report
The ongoing crypto market rally is happening because of last Friday’s macro report, which showed that the headline consumer inflation continued falling in January. This report showed that the headline Consumer Price Index dropped to 2.4% in January from 3% a few months ago. It is slowly moving towards the 2% target..
Another report showed that the labor market is making strides despite some notable layoffs announced this year. The unemployment rate dropped to 4.3% as the economy created over 130k jobs during the month.
These numbers mean that the Federal Reserve will likely cut interest rates more time than expected this month. While Fed officials have hinted at one interest rate cut this year, most analysts expect that the bank will deliver more cuts than that.
The crypto market rally is also happening as the futures open interest continues rising. Data compiled by CoinGlass shows that the futures open interest rose by nearly 2% to $100 billion, a sign that investors are adding more leverage to their positions.
Crypto Fear and Greed Index has rebounded
Additionally, the rally is happening because of the ongoing performance of the Crypto Fear and Greed Index, which has remained in the extreme fear zone in the past few weeks. It has jumped from the extreme fear zone of 8 to the current 13.
Historically, crypto bull runs normally start whenever the Fear and Greed Index falls to the extreme fear zone. A good example of this is what happened earlier this year when Bitcoin and other cryptocurrencies rallied.
Still, there is a need for caution as this rebound may be a dead-cat bounce, a situation where financial assets in a freefall rebound briefly and then resumes the downtrend trend.
