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Bitcoin’s six-day rally ended with what any rally ends with: a bold red candle. Impressionable traders were unpleasantly surprised by inflation in the United States.
Bitcoin has grown almost recoillessly from September 7 to the present day. According to the cryptovizor cryptocurrency screener, which calculates the market price of BTC / USD based on the results of trading on seven major exchanges, the maximum value of the asset rate corresponded to $ 22,912. However, the growth was interrupted by the publication of inflation data, and the price of the cryptocurrency collapsed in a few hours to $ 20,672 (that is, by 9.8%).
1-hour chart of BTC/USD. Source: Cryptovizor
According to the network monitoring resource Coinglass, the total amount of liquidation of long positions on cryptocurrency exchanges reached $ 187 million per day.
In addition, the analytical platform CryptoQuant reported that today 84,000 BTC were received on the exchanges, which is the maximum value since July 1.
Bears began to dominate the market after it became known that the consumer price index in the US (CPI) was 8.3% year-on-year in August against the forecast of 8.1%. The difference of only 0.2% was enough to bring down bitcoin. And this is despite the fact that inflation has decreased compared to July by as much as 0.8%.
Consumer price index in the United States. Source: Investing.com
The announcement of unexpectedly high inflation raised the likelihood of the Federal Reserve raising the key rate by 75 or 100 basis points next week, which will put pressure on the already volatile markets for risky assets. To date, the value of the rate is 2.5%.
The U.S. stock market also ran into trouble, with the S&P 500 down 3% and the Nasdaq Composite down 4%.
According to Jurrien Timmer, head of macroeconomic indicators at Asset manager Fidelity Investments, there can be no question of any prolonged bullish rally of risky assets until the Fed completely stops raising the key rate.
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