Market | CPI data supports peak inflation, probability of Ethereum merger increases, community shorting platform token CEL

In July, the Consumer Price Index (CPI) in the United States declined for the first time after reaching a 41-year high, indicating a potential easing of inflation and a reduced likelihood of future interest rate hikes by the FED. Cryptocurrencies and the U.S. stock market rose simultaneously, with Ethereum leading the rally supported by positive news such as the testnet merger, while platform token CEL experienced a short squeeze event similar to GME.

Data Supports Inflation Peak

The Consumer Price Index (CPI) surged to 9.1% in June, hitting a 41-year high, causing a drop in the US stock market, and Bitcoin dropped below the $20,000 mark in June and July.

However, July's CPI data supports signs of a peak in inflation and cooling down, with the following data:

• Decreased from 9.1% to 8.5%
• Slightly lower than the market's expected 8.7%
• Year-on-year growth rate at 5.9%, lower than the market's expected 6.1%

Expectations of Rate Hike in September Decrease

The cooling down of CPI further leads the market to expect a slowdown in the Federal Reserve's consecutive rate hike policy, and the possibility of a three-digit rate hike in September is now lower. The performance of the four major indices is as follows:

• Dow Jones: Up 535.11 points, 1.63%
• S&P: Up 88.55 points, 2.15%
• Nasdaq: Up 305.5 points, 2.35%
• Philadelphia Semiconductor: Up 121.80 points, 4.25%

Crypto Market

1. CEL Short Squeeze

Despite negative news such as the bankruptcy of the lending platform Celsius and the departure of its CEO from the US, the platform's token CEL has dropped nearly 90% from $2.18 to $0.28 since May. However, it rose by 228% in 30 days. Reports suggest that the Celsius community is advocating for a short squeeze against the short sellers.

There have been thousands of tweets with the "#CelShortSqueeze" hashtag on Twitter, claiming to push the CEL token to $100, similar to last year's GME event, attempting to force a short squeeze against the short sellers for profit.

2. LDO

ETH staking platform Lido Finance has seen a rise in LDO as Ethereum's merger approaches and the price of Ether rises. LDO has risen by 344% in the past 30 days. A proposal to sell tokens to venture capitalists for operational funds was reviewed in the past: https://bityl.co/Dlar, and is now under contract review by both parties.

Recent news shows that staking income on Polygon has increased to 6.3% annualized. https://twtr.in/3Khd

3. Aave

Lending protocol Aave rose by 62% in 30 days, with a 17% increase in a single day. The previous proposal for the stablecoin GHO has been approved, and funds are currently being raised for Aave v3. https://bityl.co/Dlb5

4. SNX

The Layer 2 scaling solution Optimism OP's TVL officially surpassed Arbitrum recently, making Optimism the eighth-largest blockchain, with Synthetix being the second-largest protocol on the chain, following Aave.

5. Ethereum "Final" Testnet Completes Merger

While the market has shown signs of recovery, Bitcoin's gains are evidently not as significant as Ethereum's, especially as the merger approaches realization and with the potential arbitrage opportunities of ETHPoW, Ethereum dominates the crypto market rebound.

Furthermore, Ethereum core developer Tim Beiko recently stated that the "final" testnet has successfully merged into PoS.

This indicates that unless significant issues arise, it will greatly increase the chances of a successful mainnet merger in September.

The chart "ETH/BTC" below shows the strong trend of ETH since June, with a 47.48% increase against BTC, approximately since the liquidity crisis on platforms like Celsius and 3AC occurred.