Hot CPI report puts a dent in Bitcoin and Ethereum rally, stocks also lose ground

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The crypto and stock markets are feeling the pain after unexpectedly hot data from the September 13 inflation report showed headline inflation rising 0.1% month-on-month.

Even with gas prices falling to multi-month lows and the cooling housing market, core inflation saw a 0.6% month-on-month jump and year-on-year inflation settled at 8.3%. Went.

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While market participants and investors predicted the next Federal Reserve interest hike would be a massive 0.75 basis points, many also assumed that the September 13 CPI report would be softer than anticipated.

Given that the market was reportedly “priced” up by 0.75 bps, crypto traders expected bitcoin, ether and select altcoins to break above the upside.

Well, apparently the exact opposite happened.

The Dow dropped nearly 2.6%, while the S&P 500 and Nasdaq fell 2.9% and 3.6%, respectively. Naturally, the riskier asset also declined and the price of bitcoin dropped more than 50% of its recent weekend gains to drop by 9% to $20,350. Just 1 day before the merge, the price of Ether also recovered by 7.29% to $1,590, and most of the cryptocurrencies in the top 100 are currently seeing losses from single to double digits.

While Bitcoin’s weekend rally from September 9 extended earlier this week and propelled the price to $22,800, earlier analysis cautioned that BTC was also trading near a key overhead resistance.

As seen below, BTC fell from an all-time high to multi-month resistance at $22,400 when the market opened and monthly CPI data hit media outlets. The analysis also highlighted the “persistent bear flag continuation” trend that has been going on since the bitcoin price topped $69,000 on November 10, 2021.

BTC/USDT 1-Day Chart. Source: TradingView

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

One positive thing to note is that despite the September 13 correction, bitcoin price is correcting lower in the 90-day range (pink box) between $25,400 and $17,600. From my vantage point, “nothing to watch here” unless the price dips below the $18,500 or yearly low of $17,600.

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