Home CryptocurrencyBitcoin Hot CPI news hurts Bitcoin and Ethereum, stocks also lose ground

Hot CPI news hurts Bitcoin and Ethereum, stocks also lose ground

by SuperiorInvest

Crypto and stock markets are feeling the pain after the September 13 inflation report released an unexpectedly hot number showing that headline inflation rose 0.1% month-on-month.

Even as gas prices fell to multi-month lows and the housing market cooled, core inflation rose 0.6% month-over-month and year-over-year inflation is at 8.3%.

While market participants and investors estimated the Federal Reserve’s next rate hike at a hefty 0.75 basis points, many also subscribed to a loosely held assumption that the September 13 CPI report would be softer than expected.

As the market reportedly “priced in” a 0.75 bps increase, crypto traders expected Bitcoin (BTC), ether (ETH) and select the altcoins you want to breakout.

Well, obviously the complete opposite happened.

The Dow fell 2.6%, while the S&P 500 and Nasdaq fell 2.9% and 3.6%, respectively. Naturally, risk assets also fell, with the price of Bitcoin giving up more than 50% of its recent weekend gains, down 9% to $20,350. With just 1 day left until the merger, the Ether price also retreated by 7.29% to $1590 and most of the top 100 cryptocurrencies are currently showing single to double digit losses.

While Bitcoin’s weekend rally of September 9 extended into early this week, with the price climbing as high as $22,800, previous analysis warned that BTC was also trading near key overhead resistance.

As seen below, BTC’s multi-month all-time high resistance held as the price fell to $22,400 as the market opened and the monthly CPI data hit the media. The analysis also highlighted the “gradual continuation of the bearish flag” trend that has been in play since the Bitcoin price peaked at $69,000 on November 10, 2021.

BTC/USDT 1 day chart. Source: TradingView

Barring an extremely bullish Merge event, the most likely direction for Bitcoin remains to the downside.

A positive point to note is that despite the September 13 correction, the price of Bitcoin continues to fall within its 90-day range (pink box) between $25,400 and $17,600. In my view, there is “nothing to see” until the price falls below $18,500 or the annual low of $17,600.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Cointelegraph.com. Every investment and trading step involves risk, you should do your own research when making a decision.

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