Note that the big news for today was the arrest of FTX founder Sam Bankman-Friede. He is being preliminarily charged with, among other things, financial fraud using electronic means, which alone could lead to twenty years in prison.

FTX founder Sam Bankman-Fried

Bankman-Fried was also questioned by the US Securities and Exchange Commission following his arrest. Officials accused Sam of defrauding investors in the FTX trading platform. According to the SEC, he concealed the fact that he had transferred funds from users of the FTX crypto exchange, yet received more than $1.8 billion from investors. Consequently, the entrepreneur’s problems only get bigger.

What is happening to the US economy

The Consumer Price Index (CPI) is this week’s key US economic metric, which measures inflation in the country. Although CPI data is published every month, the figures for November are of particular importance to markets. With two weeks to go before the end of the year, some are counting on a “Father Christmas rally” in risky assets – that is, a final surge up before the New Year holidays.

According to Cointelegraph sources, it’s not just about the CPI report itself. The Federal Reserve’s Federal Open Market Committee (FOMC) will also decide on another rate hike this week, and its chairman Jerome Powell will deliver a speech that analysts will traditionally scrutinise for signs of a Fed policy shift.

US Federal Reserve Chairman Jerome Powell

Here’s what the experts at the trading firm QCP Capital wrote about it.

A higher-than-expected consumer price index and a more hawkish stance by the Fed could derail the New Year rally. On the other hand, a contrary tone from Powell could lead many to look for markets to continue rising through the end of the year.

CME’s FedWatch Tool shows a 75 percent probability that the next lending rate hike will occur at 50 basis points (0.5 percent). As a reminder, the base rate has previously been increased by 75 basis points and this has been ongoing since the summer. Accordingly, in theory a 50 basis points increase would look positive.

Expected increase of the US Federal Reserve’s lending rate

As a result, the US CPI was 7.1% year-on-year. However, the forecasted index was 7.3 percent, which means that the real result was better than expected. As a result, Bitcoin reacted to the news by rising as much as $18,000.

Bitcoin rises in response to CPI data release

What will happen to Bitcoin’s exchange rate?

The major cryptocurrency continues to trade above the $17,000 zone. Following the official announcement of the bankruptcy of cryptocurrency exchange FTX, Bitcoin’s value collapsed to a new price channel.

Evai trading platform founder Matthew Dixon expects an upward spurt for Bitcoin. He says the cryptocurrency will return to its key level before the FTX collapse.

Bitcoin forecast by Matthew Dixon

Crypto-enthusiast under the nickname Profit Blue, on the other hand, has a far more pessimistic prediction on a larger scale. As part of the completion of the so-called double bottom pattern on Bitcoin’s global chart, the commentator expects another final wave of collapse in the coin’s value.

Bitcoin forecast by Profit Blue

It should be noted that most experts' forecasts regularly fail to come true. Therefore, becoming overly positive or negative towards the market after reading them is clearly not a good idea.

Obviously, the above-mentioned news about the current state of the US economy will largely determine the movement of the crypto market for a couple of months ahead. Therefore, this week’s new data is worth taking a closer look at.

Bitcoin has reached a supply shock

According to a metric called Illiquid Supply Shock Ratio (ISSR), the likelihood of a major BTC rush is higher than at any time in nearly a decade.

The ISSR metric, created by analysts Willie Wu and William Clemente, “attempts to model the likelihood of a supply shock.” Simply put, it estimates how much supply of BTC is available compared to current demand. And if demand significantly exceeds supply, it creates the conditions for a shock, which also has a positive effect on the value of the asset.

ISSR metric

As of 10 December, the ISSR index reached 3.537 points, the highest since August 2014.

US dollar gaining strength again

The US Dollar Index (DXY), which has been under bearish pressure over the past few weeks, has started to set higher lows on a 1-day chart scale. This potentially sets the stage for a rebound in the index and thus a strengthening of the US national currency.

DXY trend on a 1-day chart

In theory this trend will work against the crypto and most other markets. However, the dynamics of the DXY depends on the economic indicators of the USA mentioned at the beginning of the article. So it is more logical to follow the news closely today in order to react to the rapidly changing environment in time.


We believe that the situation in the coin market could really change for the better in case the Fed and other central banks around the world loosen their measures, so the topic of the upcoming key rate change is really very important. However, it is important to understand that the global economy will still feel the effects of previous rate hikes. This means that investors traditionally need to be prepared for all eventualities.