Bitcoin Price Drops $1,000 in 3 Minutes as US CPI Inflation Overshoots
Bitcoin (BTC) crashed below $22,000 instantly on September 13 after US inflation data failed to meet estimates.
CPI print triggers major crypto rout
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD quickly falling $1,000 after Consumer Price Index (CPI) inflation for August came in at 8.3% year-on-year.
The consensus was that 8.1% would be the final figure, and the overshoot suggested that inflation was not easing at the expected pace.
US CPI for August year-on-year above expectations at 8.3% (expected 8.1%), but lower than in July at 8.5%.
MoM core CPI comes in at
0.6%, twice as high as the expected 0.3%.Not what the Fed wants to see.
So 75bps is it at the next meeting?
— Jan Wüstenfeld (@JanWues) 13 September 2022
Nevertheless, compared to July, year-on-year growth was still down 0.2%, maintaining the overall trend of slowing CPI inflation.
However, this was not enough to avoid a crypto rout, and at the time of writing Bitcoin was below $21,500, down 4% on the day.
As market participants increased their bets on another 75 basis points and even a 100-point interest rate hike by the Federal Reserve next week, cold feet became increasingly noticeable ahead of the Wall Street open.
This is just a reality check
— il Capo Of Crypto (@CryptoCapo_) 13 September 2022
“A lot of volatility around these events and a lot of fake plays are happening,” Michaël van de Poppe, founder and CEO of trading company Eight, black.
“Remind yourself of that and avoid excessive trading. Right now, lows have been taken and some consolidation appears to be happening.”
The strength of the US Dollar Index (DXY), traditionally a headwind for crypto, saw a setback on the CPI news, passing 109 for the first time since September 9.
Ethereum wobbles as Merge hype fades
On altcoins, pain continued for Ether (ETH) as existing weakness was compounded by Bitcoin’s fall.
Related: Bitcoin and altcoins rally, but upcoming macro events may limit gains
Despite the incoming merge event, both ETH/USD and ETH/BTC extended losses as the largest altcoin by market capitalization failed to capitalize on the surrounding hype.
“Even with the CPI print, this was always an area of resistance,” popular trader Altcoin Sherpa reacted.
“Heavy interaction at this level over the last year, it’s still an area to watch out for.”
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade involves risk, you should do your own research when making a decision.
