- Crypto tokens like Celestia, Kaspa, Arweave, and Injective have surged this week.
- The US published weak consumer price index (CPI) data on Tuesday.
- The crypto fear and greed index has bounced back in the past few weeks.
Cryptocurrencies had a mixed performance in the overnight session as investors embraced a risk-on sentiment. While Bitcoin pulled back below $36,000, other tokens continued their bullish comeback.
Celestia’s TIA price rally accelerated as the new token surged by almost 40% in the past 24 hours. It has been one of the top-performing coins in the past few days as it has jumped by almost 170% from the lowest point this year.
Kaspa has also done well as its price soared by over 10% in the past 24 hours. Other top-performing coins were Arweave (AR), Gala, Jasmy, and Injective (INJ). All these tokens soared by over 10% in the same period.
The key catalyst for this rally was the latest US inflation data, which came out on Tuesday. According to the statistics agency, the headline inflation dropped from 0.3% in September to 0.0% in October. This drop translated to a move from 3.7% to 3.2%.
Core inflation, which excludes the volatile food and energy products, also declined during the month. These numbers came about two weeks after the US published weak non-farm payrolls (NFP) data.
According to the BLS, the American economy created 150k jobs in October while the unemployment rate jumped to 3.9%. Wages and labor participation rate drifted downwards a bit during the month.
A separate report by S&P showed that the manufacturing and services PMI numbers remained below the expansion zone of 50. Therefore, these numbers mean that the country’s growth was falling.
As a result, they mean that the Federal Reserve will likely leave interest rates unchanged between 5.25% and 5.50% in December. Analysts at UBS believe that the bank will then slash rates several times in 2024 to support the economic recovery.
Cryptocurrencies do well when the Fed is quite dovish as we saw during the Covid-19 pandemic. This explains why the crypto fear and greed index has jumped to 75 while the VIX index has slipped to the lowest point in over two months. The VIX has dropped by over 50% from its highest level this year.
Also, it explains why American stocks have rebounded. The Dow Jones, Nasdaq 100, and S&P 500 indices have surged recently and are approaching their highest point this year. Also, the US dollar index has plunged recently.
Looking ahead, the outlook for these tokens is bullish since it comes at a time when investors are also waiting for the next Bitcoin halving and SEC decision.
