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▲ Containers at the Port of Los Angeles, USA
The cryptocurrency market, which experienced an explosive relief rally on news of secret peace talks between the US and Iran, showed an indifferent reaction to the announcement of higher-than-expected US wholesale price data, demonstrating strong resilience in a bullish market.
According to CoinMarketCap, a cryptocurrency market aggregation site, as of 9:42 PM KST on the 14th (local time), the leading cryptocurrency Bitcoin (BTC) surged 5.04% compared to 24 hours ago, trading at $74,388. Ethereum (ETH) soared 9.00% to $2,375, while XRP and Solana (SOL) also rose by 3.17% and 4.65%, respectively. What's noteworthy here is that, in contrast to the dramatic 24-hour surge, the price volatility in the most recent hour immediately after the inflation data release remained virtually unchanged, with Bitcoin at 0.00% and Ethereum at 0.11%.
This sharp surge observed in the 24-hour indicators is entirely due to the de-escalation of geopolitical risks in the Middle East. News that the US and Iran were continuing behind-the-scenes talks through mediator Pakistan quickly dispelled fears of escalation. As the war uncertainty that had been weighing on the market subsided, a massive short squeeze occurred, and pent-up buying pressure exploded, pushing up the prices of major virtual assets in an instant.
On the other hand, the uninspired movement in the 1-hour indicators intuitively shows that the market is virtually ignoring the macroeconomic headwind of inflation. The Producer Price Index for March, announced by the US Department of Labor, rose 4.0% year-on-year, marking the largest increase since February 2023. This was a result of energy prices surging 8.5% due to rising oil prices, pulling up overall inflation.
Typically, sticky inflation data fuels concerns about prolonged high interest rates from the Federal Reserve, delivering a fatal blow to risk assets, but this time was different. The month-over-month increase was 0.5%, significantly lower than Wall Street's forecast of 1.1%, and while the main culprit for the price surge was volatile energy, core service prices remained stable. It appears the massive rally momentum brought by the geopolitical thawing completely swallowed the temporary inflation fear.
In the future, the virtual asset market is expected to continue its upward momentum, reacting more sensitively to the resolution of geopolitical issues rather than obvious macro variables like inflation data. If Bitcoin, which has lightly absorbed the bad news of delayed interest rate cuts and settled at the $74,000 mark, solidifies its current order book, the market could once again embark on a full-scale rally toward new all-time highs.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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