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XRP, SHIB, ADA: Crypto Prints Big Green Candles After Inflation Report

Wed, 05/10/2023 - 17:13
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Gamza Khanzadaev
Crypto market reacts positively to recent consumer price index update
XRP, SHIB, ADA: Crypto Prints Big Green Candles After Inflation Report
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Large green candles adorned the price charts of cryptocurrencies at noon today following the release of the U.S. inflation report. In particular, tokens such as XRP, Shiba Inu (SHIB) and Cardano (ADA) showed strong price action. As a result, in just an hour after the data release, the price of these tokens managed to break the local negative trend and reach the level of the beginning of the week.

Of these three, ADA showed the most explosive reaction, up 3%. This can be attributed either to the arrival of investors, encouraged by the report, and who decided to bet on the Cardano token. Or, a large number of accumulated short positions were opened with Cardano token, which were "shaved off" as a result of this price action.

ADA to USD by CoinMarketCap

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Breakdown of CPI report

As for U.S. inflation itself, it was better than expected: 4.9% in April after 5% in March. The market reacted positively, as expected, but it seems too early to rejoice. It is quite possible that by the end of the trading session the positivity will decline, as observed many times before.

At first glance, everything seems great. However, it is important to understand that annual inflation is now falling for technical reasons (a high base effect from last year). For example, month-on-month prices in April rose by 0.4% after 0.1% in March. In other words, price growth has accelerated.

Key Reason Behind Recent Bitcoin Spike

Nevertheless, the statistics do not look threatening or disappointing. Therefore, it can be assumed that the Fed's rate hike cycle is over.

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About the author

Financial analyst, trader and crypto enthusiast.

Gamza graduated with a degree in finance and credit with a specialization in securities and financial derivatives. He then also completed a master's program in banking and asset management.

He wants to have a hand in covering economic and fintech topics, as well as educate more people about cryptocurrencies and blockchain.