Bitcoin And Ethereum Wick Down Ahead Of CPI

As the cryptocurrency market’s price trend towards the downside, volatility has held it. These two biggest cryptocurrencies react negatively to inflation and volatility in the U.S. Consumer Price Index print (CPI), which is a measure used to determine inflation.

Bitcoin (BTC), which has experienced a rejection north at $22,000, trades at $21,600 as of the writing of this article. There was also a loss of 4% in the past 24 hours. Ethereum (ETH), trading at $1,640, has a 6% decrease over the same period following an aggressive crash in a key resistance region near $18,000.

The CPI print caused both cryptocurrency to make a drastic move towards the downside. Bitcoin dropped quickly to $21,300, while Ethereum plummeted to $1,640. The current price action in Bitcoin and Ethereum is filling those negative moves, hinting at further downsides for the cryptocurrency.

Bitcoin Price BTC BTCUSDT
BTC’s price sudden move to the downside. Source: BTCUSD Tradeview

CPI Prints beats expectations, what does it mean for Bitcoin?

CPI in the United States came in at 8.3%. Core CPI rose to 6.3%. However, expectations were for 8.1%. In other words, the market was expecting inflation to be lower than today’s metrics with the hopes of relief in monetary policy from the U.S. Federal Reserve (Fed).

The combination of a low CPI and slowdowns in the economy may have allowed the financial institution to ease up on the interest rate hike. Market participants expect another 75 basis point (bps) increase for the Federal Open Market Committee’s (FOMC).

It is possible, however, that it will not happen. recent market expectationsThe Fed is more aggressive with an increase of 100 bps in the interest rate. Current monetary policies of financial institutions have caused havoc on global markets.

A 100 bps hike might push BTC’s price down into its yearly lows and beyond. Economist and crypto analyst Alex Krüger saidHere are the details about CPI printing and the implications for U.S. Fed’s monetary policy.

Core CPI figures are terrible. A Fed pivot delay should not be more than two months because of the miss at 0.3% MoM. BTD is able to wait while shorts have some breathing room.

Are There Any Other Losses for Bitcoin or Ethereum?

The coming days are bound to see more volatility as the CPI print, market expectations about a hawkish Fed, combined with the upcoming Ethereum “Merge”. The event that will complete this network transition to Proof-of-Stake (PoS), “The Merge” has caused a lot of hype across the crypto market.

A portion of market participants is expecting the Ethereum price to operate under a “buy the rumor, sell the news” event, others expect a breach of the resistance around $2,000, and others expect the price to continue dropping from current levels.

The latter has led to a spike in upside liquidity, as traders continue to short ETH and getting “squeezed” by larger investors. This could provide ETH with the ammunition to reclaim the area around $1,700, as the market heads into “The Merge”.

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