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Bitcoin price tested above $19,000 amid U.S. inflation data release

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U.S. inflation continues to decline. The inflation rate in the largest economy fell to 5.7% in December. Financial analysts had expected the inflation rate to be 6%. This news caused a small “rally” in traditional financial markets, which also benefited the cryptocurrency market. On Thursday evening, January 12, bitcoin surged to $19,000. Ethereum steadily consolidated above $1,400. The altcoin Toncoin performed best. TON increased in price by more than 20% during the last 24 hours.

As in previous months, high energy prices continue to stimulate inflation. Fuel oil and gas prices are high, rising 65.7% and 15.5%, respectively, year-on-year. However, a decline can be seen here as well.

The fall in inflation raises hopes that the peak of the inflation wave in the U.S. may be passed. The inflation rate for goods and services was 9.1% in June. The development of core inflation, which excludes volatile energy and food prices, also points to a leveling off of inflation. The first deflationary trends can now be observed. Used car prices, for example, are down 3.3 percent from a year earlier.

Higher interest rates, while counteracting inflation, are putting pressure on the U.S. economy. As the economy slows, markets expect a rate cut to begin in the fourth quarter of next year. A rate cut could have a positive effect, especially on risky assets such as bitcoin.

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