Major crypto rout sparked by CPI print
It was agreed that 8.1% would be the most recent figure. The overshoot indicated that inflation was not slowing as expected.
The US CPI for August YoY came in at 8.3%, which is higher than expected (8.1%), but less than July (8.5%).
Hot at MoM core CPI
The 0.6% is twice as high than the 0.3% expected.
It’s not what the Fed wants.
It is now 75bps at the next meeting.
Jan Wustenfeld (@JanWues).
September 13, 2022
However, July’s year-on-year growth was 0.2% lower than July. This continues the trend of slower CPI inflation.
However, this was not enough to prevent a crypto rout. At the time of writing Bitcoin was at $21,500. This is 4% less than the previous day.
Market participants increased wagers on another 75-basis point and even a 100 percent rate hike by the Federal Reserve next Wednesday. Cold feet became more evident ahead of the Wall Street opening.
This is a simple test to see what the real thing looks like
— il Capo Of Crypto (@CryptoCapo_)
September 13, 2022
“Lots and lots of volatility around these events, and a ton fake-outs do occur,” Michael van de Poppe (founder and CEO of trading company Eight), replied.
Avoid excessive trading and keep that in mind. “At the moment, lows have been taken and some consolidation seems like it is happening.”
The strength of the U.S. dollar (DXY), which is traditionally a headwind for crypto, saw a flash recovery on the CPI news. It passed 109 for first time since Sept. 9.
Ethereum falters as Merge hype wanes
Altcoins continue to experience pain for Ether ( ETH), as the existing weakness was compounded with Bitcoin’s fall.
ETH/USD, and ETH/BTC suffered losses despite the upcoming Merge event. This is because the largest altcoin market cap did not capitalize on the hype surrounding it.
“Even with CPI printing, this was always an area for resistance,” Altcoin Sherpa stated.
“Heavy interaction with this level over last year, it is still an area to be cautious.”
These views and opinions are the author’s and do not necessarily reflect those of Cointelegraph.com. You should do your research before making any investment or trading decision.