Bitcoin (BTC) fell sharply on June 10 after surprisingly strong U.S. inflation data marked the opening of Wall Street.
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 warmer than expected # inflation strengthens more chances of fed hikes. Trader prices now in 3 half-point rate hikes and and two other small steps. Now a prime interest rate of almost 3% at the end of the year has been priced. pic.twitter.com/RYUPgK1qbt
– Holger Zschaepitz (@Schuldensuehner) June 10, 2022
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 US announced that the annual CPI rate was unreasonably adjusted in May 8.6%, the highest rate since December 1981. Bitcoin fell below $ 30,000 after the release of the higher-than-expected US CPI. https://t.co/WkNaJLclsx
– Wu Blockchain (@WuBlockchain) June 10, 2022
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 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.
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