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Bitcoin Price Falls Below $ 29,500 After ‘Unexpected’ US Inflation High 40 Years High

Bitcoin Price Falls Below $ 29,500 After 'Unexpected' US Inflation High 40 Years High

Bitcoin (BTC) fell sharply on June 10 after surprisingly strong U.S. inflation data marked the opening of Wall Street.

1 hour candle chart of the BTC / USD pair (Bitstamp). Source: Trade View

Trader: Bitcoin will be ‘painful’ if it does not hold $ 29,300

Data from Cointelegraph Markets Pro and TradingView showed a $ 600 drop for BTC / USD following the release of the Consumer Price Index (CPI) figures in May.

Despite the hope that the worst inflation period was over, the May CPI came in at 1% m / m and 8.6% y / y, returning to levels not seen since 1981. Estimates had only forecast half the jump in a month anuas.

Bitcoin felt the effects of the crisis immediately, and the market seemed to oppose the prospect of further monetary inflation to curb increasingly aggressive price rises.

According to Bloomberg, operators are now expecting three 50-point increases in prime interest rates from the U.S. Federal Reserve in June, July, and September, respectively.

US inflation rises higher than expected Nutrition rises are likely to rise further. Operators are now counting on three half-point rate hikes and two other small steps. A policy rate of almost 3% is now expected at year end. pic.twitter.com/RYUPgK1qbt – Holger Zschaepitz (@Schuldensuehner) June 10, 2022

In response, Bitcoin traders wanted to see how different points could fall within the current firm trading range if the volatility continued. For Cointelegraph contributor Michaël van de Poppe, the key zone was around $ 29,300.

“Let’s see how bitcoin reacts to this level of support,” he said. declared to his Twitter followers after the departure of the IPC.

“If we go down, it will be painful.”

Popular commentator WhalePanda, meanwhile, warned panic investors against reconsidering its BTC allocation due to macroeconomic considerations. “Throwing away your bitcoins because inflation is higher than expected is one of the most dumb things you can do,” he said. writing.

The United States reported an unadjusted annual CPI rate for the May season of 8.6%, the highest rate since December 1981. Bitcoin fell below $ 30,000 after the publication of the higher-than-expected US CPI. https://t.co/WkNaJLclsx – Wu Blockchain (@WuBlockchain) June 10, 2022

In contrast, the Russian ruble gained 5% on the day as the country’s central bank rallied against the Fed’s central bank, cutting rates to levels not seen since before the start of the war with Ukraine.

In other comments on social media, Anthony Pompliano, co – founder of Morgan Creek Digital, said, Put down For some time US monetary policy has been “non-disciplinary”, qualifying inflation “national crisis”.

“The last time inflation was so high in America, they literally changed the CPI methodology,” he said. added.

US inflation charter. Source: Federal Reserve

US dollar rebounds and cryptocurrencies are suffering

One asset that has not suffered from the CPI at all is the US dollar.

READ ALSO: The $ 30,000 BTC price has a ‘significant impact’ on bitcoin miners’ profits – analysis

The latest data from the US Dollar Index (CPI), which measures the strength of the dollar against a basket of trading partner currencies, showed that the previous downtrend has reversed sharply, with only inflation adding to its trajectory.

The result was likely to be a new wind for bitcoin and broader risk assets ahead of the open US equities.

At the time of writing, the DXY was at 103.9 points, again approaching a 20 – year high of 105 seen last month.

US dollar index (CPI) day chart chart. Source: Trade View

The views and opinions expressed herein are those of the author only and do not necessarily reflect the views of Cointelegraph.com. All investment and business transactions involve risk. You should do your own research before making a decision.

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