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

BTC, ETH, altcoins and stock prices crumbled in the face of a hotter than expected CPI report. Is there room for a short-term recovery?

Crypto and stock markets are feeling the pain after the Sept. 13 inflation report printed an unexpectedly hot figure that showed headline inflation rising by 0.1% month-over-month.

Even with gas prices falling to multi-month lows and a cooling housing market, core inflation saw a 0.6% month-over-month bump and year-to-year inflation sits at 8.3%.

This chart from @TheTerminal shows why this #CPI number is so disappointing. The contribution of energy has declined, as expected; but services inflation is now rising sharply. Not what the #FOMC will have wanted to see. pic.twitter.com/BsfwFsuyD5

— John Authers (@johnauthers) September 13, 2022

While market participants and investors had estimated the next Federal Reserve interest hike to be a hefty 0.75 basis points, many also subscribed to a loosely held assumption that Sept. 13’s CPI report would come in softer than projected.

Given that the market had supposedly “priced in” a 0.75 bps hike, crypto traders expected Bitcoin (BTC), Ether (ETH) and select altcoins to break out to the upside.

Well, obviously the complete opposite occurred.

Perma-bull Fed pivot CPI traders REKT. LOL

— Big Smokey (@big_smokey1) September 13, 2022

The Dow slid about 2.6%, while the S&P 500 and Nasdaq fell 2.9% and 3.6%, respectively. Naturally, risky assets also fell and Bitcoin price gave up more than 50% of its recent weekend gains with a 9% pullback to $20,350. With just 1 day left before the Merge, Ether price also pulled back 7.29% to $1,590, and the majority of cryptocurrencies in the top 100 are nursing single to double-digit losses at the moment.

While Bitcoin’s weekend rally from Sept. 9 extended into the start of this week and the price pushed as high as $22,800, the earlier analysis cautioned that BTC was also trading near a key overhead resistance.

As seen below, the multi-month resistance from BTC’s all-time high held as price crumbled at $22,400 when the market opened and the monthly CPI data hit media outlets. The analysis also highlighted the “successive bear flag continuation” trend that has been in play since Bitcoin price topped out at $69,000 on Nov. 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 Sept. 13’s correction, Bitcoin price continues to chop about in its 90-day range (pink box) between $25,400 and $17,600. From my vantage point, there’s “nothing to see here” until the price breaks below $18,500 or the yearly low at $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, you should conduct your own research when making a decision.

Related Posts

Transit Swap ‘hacker’ returns lion’s share of $23M in stolen funds: Finance Redefined

Majority of the DeFi tokens in Top-100 traded in red barring a few, thanks to the weekend rout in the market correction towards the end of the…

New Zealand Rugby Buys 33 World Of Women Galaxy NFTs

The New Zealand Rugby Commercial, NZ’s commercial arm of the popular sport, has purchased a staggering 33 World of Women Galaxy (WoWG) NFTs. This is the team’s…

Decentraland Gains New Betting Casino: Holy Temple

Decentraland, the popular metaverse world, has a brand new attraction – The Holy Temple Casino. Built by Metaskins, the fully customizable, one-stop-shop for all metaverse and NFTs…

Gold and Silver Prices Slide Lower Following US Jobs Report — Analyst Says Data Suggests ‘Market Bottom Is in Place’

On Friday, October 7, 2022, the precious metals gold and silver dropped in U.S. dollar value following the recent U.S. jobs report for September. The USD value…

Luna Foundation Wants to Repay Small-Time UST Investors, but Why Can’t They?

Crypto researcher FatManTerra slams Terra Luna Foundation Guard’s defense on why it can’t repay bereft TerraUSD (UST) investors. FatManTerra responded to a tweet by the Luna Foundation…

BNB Chain to Conduct Governance Votes on What to Do With the Stolen Funds

After losing millions of dollars worth of assets in a cross-chain hack, the team behind BNB Chain – formerly Binance Smart Chain (BSC) – plans to conduct…

Generated by Feedzy