Other cryptocurrencies fell on Wednesday after investor sentiment deteriorated following the release of key inflation data in the United States.
The price of Bitcoin has reached 4% in the past 24 hours at $19,200, having previously been on the rise, approaching the $20,000 level. It went down though on Tuesday. Biggest Cryptocurrency with Mass rally last weekendHands fell back to $22,000, but have since fallen back.
US Consumer Price Index data revealed annual inflation by 9.1%– Steady ahead of the 8.8% figure the market had expected and a four-decade high. The CPI data is key given the centrality of stagnation risks to the sell-off in stocks in 2022, which led to both lower
and heavy technology
In a bear market and put pressure on cryptocurrencies.
In the face of the highest inflation in decades, the Federal Reserve has already moved aggressively to tighten monetary policy, and is expected to continue to do so as long as prices remain elevated. The fear in the markets is that this could dampen demand to the point of causing a recession, which would be a problem for risky bets like bitcoin.
The higher-than-expected CPI number may have spooked investors by increasing the likelihood of a more severe Fed presence. In any case, The release sent stocks lower on Wednesday, which opened the way for digital assets to track it. While cryptocurrencies should, in theory, be traded as uncorrelated assets, Bitcoin and its peers have shown that they move in line with stocks, especially tech stocks.
“Markets continue to expect inflation to rise, and are persistently disappointed,” said David Donabedia, chief investment officer at CIBC Private Wealth. This likely means a 75 basis point move in July and September [Fed] Meetings… There is nothing positive for the markets in this report. “
But at least one analyst believes that the downside of bitcoin could be muted because investors were expecting a higher CPI figure.
The market has been pricing in high inflation numbers this week, so Bitcoin’s downside may be limited than previously expected. However, we cannot be too optimistic,” Yuya Hasegawa, an analyst at crypto exchange Bitbank said before the release of the CPI.
However, from a technical perspective, the ongoing bad news will likely lead to an even more painful sell-off in cryptocurrencies.
Katie Stockton, managing partner at tech research group Fairlead Strategies, said Tuesday that Bitcoin The bearish momentum was stronger, with an increasing possibility that prices will test the support as low as $18,300. Even that level would still be above Bitcoin’s recent bottom, below $18,000, which was reached at the sell-off lows in June.
Outside of Bitcoin, a large portion of the crypto space has been shaping up similarly.
The second largest digital asset, it is down 4% and has taken in over $1,000. Among the smaller cryptocurrencies, or altcoins,
All fell 5%. Memecoins – initially intended to be online pranks – have been steadily advancing with
4% and 5% are in red, respectively.
Besides macro factors, cracks in the cryptocurrency industry itself have exacerbated recent price drops, including The collapse of the stable tera coin and fail Hedge Fund Three Arrows Capital. Bitcoin continues to trade at less than a third of its record level, reached in November 2021, and just culminated Worst quarter in over 10 years.
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