Bitcoin drops to support as looming CPI print shakes up crypto and equity markets

Bitcoin drops to support as looming CPI print shakes up crypto and equity markets – Mail Bonus


Crypto and equity markets tumbled slightly on August 9 as traders got a little stiff ahead of tomorrow’s Consumer Price Index (CPI). Details of the print will shed light on whether the Central Bank’s aggressive interest rate hikes are effective in curbing collapsing inflation, and this could influence the size of future hikes.

Earlier this week, Tesla CEO Elon Musk indicated that July data would reflect the U.S. reaching a peak in inflation and that any slowdown would be “mild to moderate.” The consensus is now that July data will be lower than the record 9.1% seen in June. Energy prices (oil, natural gas) fell sharply in July, and the central bank is hopeful that previous back-to-back increases of 0.75 basis points will combat rising prices in other parts of the economy.

As usual, Bitcoin (BTC), Ethereum (ETH) and most altcoins retreated as traders reduce risk ahead of CPI. BTC price dropped to $22,800, while Ether corrected to $1,670. The argument for traders taking refuge in stablecoins makes sense, but from a technical analysis perspective, today’s pullback is simply a lower support test after last week’s latest support resistance, and big assets like ETH and BTC continue. to trade within their multi-week ranges.

According to independent market analyst Michaël van de Poppe, the fear of the August 10 CPI “unreasonable” and once the series of retests is complete, BTC price should rise towards $28,000.

Adding to the narrative that the current pullback is “expected”, trader @52kskew suggested that BTC’s price action is affected by a “healthy relaxation in the perps” as spot Bitcoin is sold at “logical resistance”.

The pseudonymous trader Big Smokey explained that the correction in the market is simply “reducing risk from traders waiting for the CPI print this week.”

According to Big Smokey, the tendency for traders to “interpret recent statements from the Fed + after the CPI print market performance” as dovish and if this trend holds, the market could bounce if the inflation figures are lower than in June.

DyLeClair’s expert, however, believes that in the grand scheme of things, stocks are in the “late stage of the stock market index” and he suggested that BTC will sweep the lows in the next 6 to 12 months if a “correlation 1.0 event” occurs.

The total cryptocurrency market cap is currently $1.09 trillion, and Bitcoin’s dominance rate is 40.5%.

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