30s Summary

The value of cryptocurrencies dropped by over 2.4% on October 10 due to a disappointing Consumer Price Index (CPI) report, a stronger US dollar, and less trading. The inflation data has led to uncertainties over the Federal Reserve’s rate cuts, previously driving up crypto prices. Trading volumes also fell to their lowest since June 2024, accompanied by withdrawals from Bitcoin ETFs amid a strengthening US dollar.

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The value of cryptocurrencies dipped a bit on October 10th. This was due to several things: a disappointing Consumer Price Index (CPI) report, a stronger US dollar, and less people trading.The total market cap for all cryptos dropped by over 2.4%, landing at around $2.02 trillion.

Let’s look at why this happened. Firstly, data from the US Bureau of Labor Statistics showed inflation rose 0.2% from the previous month, and 2.4% over the year. This was higher than the expected 0.1% monthly increase and 2.3% yearly increase.

This made people less sure about whether the Federal Reserve would keep cutting interest rates. In September, the Fed had cut rates by a bigger-than-usual 0.5%, which boosted crypto prices. But with this new inflation data, people aren’t so sure we’ll see another big rate cut in November.

On top of this, the amount of trading happening on exchanges where you can buy and sell cryptocurrencies – also fell to its lowest level since June 2024. This capped off a three-month streak of rising trade volume. Basically, fewer people were buying and selling their cryptos. People began to withdraw their money from Bitcoin exchange-traded funds (ETFs), showing a lack of confidence in the market. This coincided with the US dollar getting stronger compared to a bunch of other major currencies.

As always, investing in cryptocurrencies comes with its risks, so make sure you do your research before making any decisions.

Source: Cointelegraph