The crypto markets turned green after the CPI report on Thursday showed the inflation rate at 8.2% in the US. The markets saw a remarkable spike as Bitcoin and Ethereum jumped more than 5% and is currently up 3.8%. Data from CoinMarketCap shows that leading crypto exchanges saw a rise in trading volume recording a triple-digit percentage increase.
In addition, decentralized exchanges (DEX) experienced a similar spike in trading volume with millions of inflows in 24 hours. Uniswap recorded $264 million in inflows, Kine Protocol $274 million and dYdX saw the highest with $770 million worth of transactions.
Coming to global crypto exchanges, FTX trading volume spiked 180%, while Binance trading volume was up 133%. All the top five crypto exchanges recorded a trading volume spike in triple-digit percentages.
The development suggests that investors are chasing the short-term pumps to salvage their previous losses. However, the markets might not remain in the green as both Bitcoin and Ethereum have traded in the red during the weekends in the last two months. The pump could be temporary as Bitcoin is unable to break its resistance levels of $21,000.
BTC is nearing the $19,800 level and could be rejected when it tries to climb above the $20,000 mark during the weekend. The present spike is attributed to institutional investors who mostly pump and later dump cryptos based on the CPI data.
What Next For Bitcoin & Ethereum?
The markets are yet to come out from the harsh grip of the bears and Bitcoin and Ethereum could face further corrections. Short-term pumps like today are a common phenomenon in 2022 but trade in the red the majority of the time. Several financial analysts have predicted that 2023 could bring in a recession and drag the markets down to new lows.
Bank of America has predicted that the US will face job cuts to the tune of $175,000 each month. Job cuts lead to insecurity opening up the doors for the global markets to tank amid a recession.
Therefore, it is advised to remain cautious before taking an entry position in Bitcoin and Ethereum. BTC and ETH at $19K and $1.3K levels respectively are still considered to be high in value before an upcoming crash.
At press time, Bitcoin was trading at $19,825 and is up 4% in the 24 hours day trade. Ethereum was trading at $1,326 and is up 3.1% in the day’s trade.