By Omkar Godbole (All times Eastern unless otherwise noted)
As bearish forecasts continue to emerge, a real-time tracker of US inflation provides good news for cryptocurrency bulls.
The Truflation Index, an independent, real-time, blockchain-based tracker of daily changes in the Consumer Price Index (CPI), fell below 1% for the first time since at least the beginning of 2021. The index has fallen since mid-December from 2.67%, well below the Fed’s 2% inflation target.
So while official government data remains 700 basis points above the Fed’s target, real-time levels show inflation is falling rapidly, a scenario that supports the central bank’s case for a rapid rate cut.
This is good news for liquidity-sensitive assets like Bitcoin especially since the cryptocurrency is currently trading 38% below its all-time record of $126,000 set in early October. Truflation’s reading also contrasts with some analysts’ forecasts for a recovery in inflation.
Cathie Wood, chief executive of Ark Invest, said: “Consumer price inflation, as measured by Truflation, has fallen to 0.86% year-on-year, well below the 2-3% range of the past two years. We believe inflation may turn negative, contrary to forecasts by BlackRock and Pimco.”
The good news doesn’t stop there. Robin Brooks, a senior fellow at the Brookings Institution, correctly warned last year of deteriorating fiscal conditions in Japan and predicted that Kevin Warsh, President Donald Trump’s pick for Fed chair, could cut interest rates by 100 basis points this year.
Let’s see if these things can alleviate the pressure on the cryptocurrency market. At press time, BTC was trading little changed at around $78,000, with smaller coins showing some recovery, as evidenced by the CoinDesk 80 index rising 2% in 24 hours. Hyperliquid’s HYPE and POL stand out as the only coins in the top 100 to gain more than 10%.
Analysts remain optimistic about the long-term outlook.
“Cryptocurrency positioning does remain fragile in the short term,” Emir Ibrahim, an analyst at digital asset trading firm Zerocap, told CoinDesk in an email. “But structurally, continued institutional adoption, the expanded use of stablecoins in cross-border settlements, and the rise of tokenized real-world assets should improve the depth and interoperability of the cryptocurrency market.”
Ibrahim added: “Over time, these developments are expected to reinforce Bitcoin’s depreciation hedge characteristics, even if markets are not yet fully pricing in this assertion today.”
In traditional markets, strong manufacturing data on Monday pushed the U.S. dollar index and Treasury yields higher. Stay alert!
Read more: For analysis of today’s altcoin and derivatives activity, see Today’s Cryptocurrency Market
what to see
For a more comprehensive list of this week’s events, see CoinDesk’s “Crypto Week Ahead.”
- cryptocurrency
- Macro
- US JOLT data on February 3 was delayed due to the partial US government shutdown.
- income (Estimate based on FactSet data)
- February 3: Galaxy Digital (GLXY), pre-market, -$0.95
- February 3: PayPal Holdings (PYPL), pre-market, $1.29
Token event
For a more comprehensive list of this week’s events, see CoinDesk’s “Crypto Week Ahead.”
- Governance votes and calls
- Unlock
- Token issuance
- February 3: Conflux (CFX) will be listed on Kraken.
- February 3: Usualx’s unlock window closes.
Meeting
For a more comprehensive list of this week’s events, see CoinDesk’s “Crypto Week Ahead.”
market trend
- BTC is down 0.1% since 4pm ET on Monday to $78,400.52 (24 hours: +0.9%)
- ETH fell 2.03% to $2,292.99 (24 hours: +0.14%)
- CoinDesk 20 fell 0.94% to 2,278.33 (24 hours: +0.55%)
- The comprehensive pledge rate of Ethereum CESR increased by 3 basis points to 3%
- The BTC financing interest rate on Binance is 0% (0.0372% annualized)
- DXY remains unchanged at 97.58
- Gold futures rose 6.13% to $4,938.00
- Silver futures rose 11.81% to $86.10
- The Nikkei 225 closed up 3.92% to 54,720.66
- The Hang Seng Index closed up 0.22% to 26,834.77 points
- The FTSE fell 0.05% to 10,336.54
- Europe’s Stoxx 50 rose 0.56% to 6,041.35
- The Dow closed up 1.05% on Monday at 49,407.66 points
- The S&P 500 closed up 0.54% at 6,976.44 points
- The Nasdaq Composite Index closed up 0.56% at 23,592.11 points
- The S&P/TSX Composite Index closed up 0.82% at 32,183.88 points
- The S&P 40 Latin America Index closed up 0.91% at 3,656.11 points
- The U.S. 10-year Treasury bond rate rose 1.2 basis points to 4.289%
- E-mini S&P 500 futures rose 0.2% to 7,016.25
- E-mini Nasdaq 100 futures rose 0.51% to 25,981.00
- E-mini Dow Jones Industrial Average futures unchanged at 49,522.00
Bitcoin Statistics
- Bitcoin dominance: 60.08% (0.18%)
- Ethereum-Bitcoin ratio: 0.02919 (-2.09%)
- Computing power (seven-day moving average): 870 EH/s
- Hash price (spot): $35.10
- Total fee: 3.42 BTC / $266,100
- CME Futures Open Interest: 113,495 BTC
- BTC in gold: 15.8 ounces.
- Bitcoin and gold market capitalization: 5.22%
technical analysis
- Chart showing Solana Price movements since 2022 shown in candlestick format.
- The price fell to support at $95.16, which is defined by a horizontal line connecting the low hit last April.
- If this support is broken, Solana has little support until around $30. Therefore, bulls need to hold on to $95.16 to avoid a deeper collapse.
crypto stocks
- Coinbase Global (COIN): Closed at $187.86 (-3.53%) Monday pre-market, up 0.90% to $189.55
- Circle Internet (CRCL): Closed at $58.86 (-7.93%), +1.95% at $60.01
- Galaxy Digital (GLXY): Closed at $26.44 (-6.44%), +1.06% at $26.70
- Bullish (BLSH): Closed at $28.77 (-4.74%), +2.57% at $29.51
- MARA Holdings (MARA): Closed at $9.12 (-4.00%), +0.77% Closed at $9.19
- Riot Platforms (RIOT): Closed at $15.32 (-0.97%), +1.31% at $15.52
- Core Scientific (CORZ): Closed at $17.87 (-0.67%)
- CleanSpark (CLSK): Closed at $11.04 (-6.76%), +1.36% at $11.19
- CoinShares Valkyrie Bitcoin Miner ETF (WGMI): Closed at $44.44 (-1.38%)
- Exodus Movement (EXOD): -14.59% to close at $11.18, -0.63% to close at $11.11
Cryptocurrency Treasury Corporation
- Strategy (MSTR): Closed at $139.63 (-6.73%), +1.12% at $141.19
- Strive (ASST): Closed at $0.72 (-11.94%), +2.32% at $0.74
- SharpLink Gaming (SBET): Closed at $7.79 (-12.27%), +0.77% at $7.85
- Upexi (UPXI): Closed at $1.62 (-8.99%), +2.47% at $1.66
- Lite Strategies (LITS): Closed at $1.14 (-5.79%)
ETF flows
Spot BTC ETF
- Net daily traffic: $561.8 million
- Cumulative net flow: $55.55 billion
- Total BTC holdings are approximately 1.28 million
Spot ETH ETF
- Net daily traffic: -$2.9 million
- Cumulative net flows: $12 billion
- The total amount of ETH held is about 5.9 million
Source: Farside Investors
