Bitcoin Breaks $18K Barrier as More BTC Supply Go Into Profits
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Bitcoin (BTC) experienced a significant increase in value over the past 24 hours, following the release of the latest US Consumer Price Index (CPI) data report. The data showed that inflation in December was 6.5%, which was on par with expectations. The US Bureau of Labor Statistics released the data, and before the release, the crypto market was showing signs of bullishness with most assets in the green.
The Consumer Price Index is a crucial indicator that measures changes in prices over time. The Federal Reserve uses this data to determine interest rate increases. The decrease in inflation is beneficial for the economy on many fronts.
The 6.50% year-over-year inflation increase is the lowest since October 2021. The crypto market may have had a short-term reaction to the decrease in the CPI data, but in the long term, the cooling of inflation could be beneficial for traders.
Lower inflation means that the average crypto trader will have to spend less money on living costs, which means they will have more money to potentially invest in options like crypto. This could also be a reason behind the increase in the value of BTC.
Glassnode Reports Increase of Profitable Bitcoin Supply
On-chain data shows that 13% more of the Bitcoin supply has gone back into the green as BTC has broken past the $18,200 level today. This increase comes as a result of the jump in price for BTC following the release of the CPI data.
As #Bitcoin rallies to $18.2k, over 13% of the Circulating Supply has returned to profit.
The observed sharp move upwards in this metric helps to confirm that a large volume of $BTC was acquired between $16.5k and $18.2k.https://t.co/yflZloDbSP pic.twitter.com/J8egLvYt3w
— glassnode (@glassnode) January 12, 2023
According to data from Glassnode, an on-chain analytics firm, the supply of profit was below 50% not too long ago. The “percent supply in profit” is an indicator that measures the percentage of the total circulating Bitcoin supply that is currently carrying some amount of profit.
According to a Glassnode chart, the Bitcoin percent supply in profit had dropped to just 47% between November last year and the start of 2023, which means that a majority of the circulating supply had entered a state of loss during this period.
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