Market deep dive: CPI numbers cause for a volatile end to the week

Yesterday, the US September CPI numbers were released and caused for a volatile day, to say the least.

  • CPI (YoY) at 8.2% (forecast 8.1%; previous 8.3%)
  • CPI (MoM) at 0.4% (forecast 0.2%; previous 0.1%)
  • Core CPI (YoY) at 6.6% (forecast 6.5%; previous 6.3%)
  • Core CPI (MoM) at 0.6% (forecast 0.5%; previous 0.6%)

The S&P reached intraday lows of 3,500 before jumping more than 5% and closing above the 200w moving average, which seems to be offering support, for now.

BTC$ and ETH$ fell 3.96% and 5.27%, respectively, upon the release. But they both showed an immediate reaction as they rebounded 9.21% and 11.69% to the current 19.8k and 1.32k.

BTC$ is on its way to booking the first three consecutive positive weeks since last November, before the all-time-high. ETH/BTC has continued its downtrend since the beginning of September. Concurrently, BTC dominance has been moving up and is currently at 41.96%. I expect this to continue as money flows out of riskier altcoins and into bitcoin, until there are blue skies ahead.

The altcoin sector was quiet this week. The Top 2 performers, by far, are Huobi Token (HT) and TerraClassicUSD (USTC), posting gains of 93.6% and 82.4%, respectively.

Last Friday, Huobi announced it would sell its entire shareholding to Hong Kong-based Capital Management. The exchange was facing problems last year after China put a ban on cryptocurrencies, removing a significant number of users from the exchange.

On Monday, the market reacted very positively to the news that Tron founder, Justin Sun, announced his membership on Huobi’s global advisory board through a tweet. He also spoke to the big moves coming for the HT token, as well as the planned brand upgrade. Furthermore, he pointed to the pivotal role BNB has played in Binance becoming the leading exchange, and the shift in focus needed on HT, for Huobi to have similar success. Huobi is currently ranked 8th by Coingecko’s trust score.

On the flipside, Lido DAO (LDO) is among the worst performers of the week, dropping 9.1%. Lido provides liquid staking possibilities, but many will know stETH and its de-pegging fiasco. They currently have 4.2m ETH staked and 30% of the staked ETH market share.

Last week, Lido announced that ETH holders on Arbitrum and Optimism would now be able to stake ETH. Additionally, they allocated 150,000 LDO tokens in rewards per month as farming incentives to build liquidity on Balancer, Curve, and the Kyber Network. While this news is generally positive, as it offers a cheaper way for ETH holders to stake through Layer 2s, the market realises that LDO is another governance token with no economic benefits accruing to its holders. LDO seems like a perfect example of buy the rumour sell the news, as it rallied this summer, and fell during the merge.

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