Early forecasts by economists expected that the headline consumer price index, which includes healthcare, housing costs, energy, as well as food to rise by 3.1% in February, the numbers came in above that at 3.2% year-over-year. However, more worrisome was the forecast of the core CPI which strips out volatile items like energy and food which was expected to show an increase of 0.4% month over month well above January’s inflation numbers which showed inflation increased month over month by 0.3%.

Because the forecast for the upcoming CPI reflected that inflation would continue to run hot the identification of a doji candle identified in the dollar index on Friday, and gold yesterday were significant because they can be a signal of an imminent key reversal.

Today the Bureau of Labor Statistics released the most current information on inflationary data from February. “The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in February on a seasonally adjusted basis, after rising 0.3 percent in January, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased by 3.2 percent before seasonal adjustment.

The index for shelter rose in February, as did the index for gasoline. Combined, these two indexes contributed over sixty percent of the monthly increase in the index for all items. The energy index rose 2.3 percent over the month, as all of its component indexes increased. The food index was unchanged in February, as was the food at home index. The food away from home index rose 0.1 percent over the month.”

Doji Signals: Gold’s Decline and Dollar’s Rise

Because the report revealed inflation was running even hotter than the forecast by economists’ gold dropped significantly because the report raised questions about whether the Federal Reserve would initiate its first rate cut by June. This also caused the dollar to trade higher, as a byproduct of treasury yields increasing.

Earlier this Monday, Ripple’s CEO Brad Garlinghouse, took to X (formerly Twitter) to share insights into the broader market trends. He emphasized the soaring volumes of Bitcoin ETFs as a leading indicator of the crypto market’s movements. 

This comes alongside the anticipation of Bitcoin’s “halving,” a significant event that reduces the reward for mining new blocks. 

This comes as XRP, the cryptocurrency associated with Ripple, has seized the spotlight, becoming the top-performing asset among the top 100 cryptocurrencies by market capitalization. 

XRP surges to the top 

XRP has clinched an enviable position, recording an astonishing 18.9% price increase over a 24-hour period and propelling its trading volume past the $5 billion mark. 

This surge places XRP at the pinnacle of market performance, overshadowing Litecoin (LTC) and other cryptocurrencies. 

Such market behavior shows a strong investor appetite for XRP as it leads the pack with substantial trading activity and heightened interest in derivatives trading.

The new market catalysts 

The cryptocurrency market has found a new measure of success in the Bitcoin ETFs, which have seen exceptional volumes and activity. 

Eric Balchunas of Bloomberg pointed out the “absurd” success of Bitcoin ETFs, noting the staggering $55 billion in assets and double that volume at $110 billion in just the first two months since their inception. 

Bitcoin itself has mirrored this success, hitting a new all-time high of $72,704 on the Bitstamp exchange.  

Bears Remain in Control

A bearish continuation of the long-term downtrend, begun from the August 2023 peak at 10.03, triggered initially on December 4 with a breakdown from a rising parallel trend channel. Further confirmation for the continuation of the bear trend to a new trend low triggered on February 8. Subsequently, support was eventually found at the 1.52 trend low seen several weeks ago. That low led to a rally to test resistance where support was seen earlier in February and April 2023. It was in a range from 1.95 to 1.97. The high of the recent counter-trend rally was 2.01.

Counter-Trend Rally Confirms Bearish Price Structure

The critical resistance zone around 1.95 to 1.97 was clearly tested and price was rejected to the downside from the 2.01 high. Note that the highest daily close during the advance was at 1.95. That seems to indicate that the market recognized the price range. Last week’s high not only successfully tested resistance near prior trend lows. The lower boundary of a falling parallel channel was also successfully tested as resistance. That channel is marked with dashed blue lines. Similarly, the bottom of the channel was clearly resistance following the gap down on January 29.

78.6% Retracement Looks More Likely

To summarize, during the recent countertrend rally natural gas hit resistance at key prior support zones. This is common bearish behavior within the progression of a downtrend. Therefore, since the pullback from the 2.01 high is retracing further, the potential to test recent lows around 1.58 to 1.52 increases. The possibility of natural gas falling below 1.52 remains a possibility. Nevertheless, a clear bullish reversal from the 61.8% or 78.6% retracement zones will put the countertrend rally back in play. As noted yesterday, it may just be that the rally is expanding its swings so that the pattern creates a C point on a rising ABCD pattern.

For a look at all of today’s economic events, check out our economic calendar.

The bull run continues on the cryptocurrency market, according to CoinStats.

ADA/USD

The price of Cardano (ADA) has increased by 2.5% over the last 24 hours.

On the daily time frame, the rate of ADA is accumulating energy for a further move. The upward move will continue only if bulls get the price back to the $0.80 zone. 

If that happens, there is a chance to see a test of $0.82 soon.

ADA is trading at $0.7349 at press time.

BNB/USD

Binance Coin (BNB) is an exception to the rule, going down by 1%.

On the daily time frame, the price of BNB has once again bounced off the resistance of $533.9. If the candle closes far from this mark, sellers might seize the initiative, which could lead to a correction to the $500 zone.

BNB is trading at $519.5 at press time.