Bitcoin (BTC) immediately fell below $22,000 on September 13 when US inflation data failed to meet estimates.
CPI Data Big Reasons Cryptocurrency Rout
Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair quickly dropped $1,000 after consumer price index (CPI) data for August was weak, up 8.3% year-on-year.
The consensus was for the latest figure to be 8.1%, and the overshoot suggests that inflation is not slowing at the expected pace.
US IPT for August YoY coming in above expectations at 8.3% (8.1% expected) but lower than in July with 8.5%.
Core CPI MoM coming in hot at
0.6% twice as high as the 0.3% that was expected.
Not what the Fed wants to see.
So it’s 75bps at the next meeting?
— Jan Wüstenfeld (@JanWues) September 13, 2022
US CPI for August year-on-year came in above expectations at 8.3% (8.1% expected) but by July at 8.5%. Core CPI m/m is very high at 0.6%, double the 0.3%. This is not what the Fed wants to see. So will the 75 basis points be implemented at the next meeting? — Jan Wüstenfeld (@JanWues) September 13, 2022
However, compared to July, year-on-year growth is still down 0.2%, preserving the general trend of CPI inflation slowing down.
This was not enough to prevent a cryptocurrency raid, however, and at the time of writing, bitcoin was below $21,500, down 4% on the day.
As market participants raised bets on another 75 basis point, or even 100 basis point, rate hike from the Federal Reserve next week, the nervousness ahead of the Wall Street open was becoming more pronounced.
This is just a test of the truth
— il Capo Of Crypto (@CryptoCapo_) September 13, 2022
This is just a reality check – he Capo Of Crypto (@CryptoCapo_) September 13, 2022
“There’s a lot of volatility around these events and a ton of false breakouts are actually happening,” it said answered Michaël van de Poppe, founder and CEO of the trading company Eight.
“Remember this and avoid over-trading. At the moment the lows have been taken and some consolidation appears to be taking place.”
Due to the strength of the US Dollar Index (DXY), which traditionally indicates headwinds for cryptocurrencies, the CPI news flashed, topping 109 for the first time since September 9.
Fallers ether as the Merge upgrade craze fades
Turning to altcoins, the struggles of Ether (ETH) continued, with the existing weakness exacerbated by bitcoin’s slide.
Also Read: Bitcoin And Altcoins Soar Higher, But Upcoming Macro Events Could Limit The Rally
Despite the upcoming Merge Upgrade, both ETH/USD and ETH/BTC extended their losses as the largest altcoin by market capitalization failed to capitalize on the hype.
“Even with the CPI numbers, it’s always been an area of resistance,” he said. answered the famous Altcoin trader Sherpa.
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