Bitcoin (BTC) fell sharply on June 10 after surprisingly high inflation information from the US shook markets before Wall Street opened.
Trader: Bitcoin will be “painful” if $ 29,300 fails
Data from Cointelegraph Markets Pro and TradingView followed a $ 600 dive for BTC / USD when the CPI hit in May.
Despite hopes that the worst of the inflation period was over, the CPI in May measured 1% month-on-month and 8.6% year-on-year – a return to what has not been seen since 1981. Estimates had predicted only half as much a big jump last month.
Bitcoin immediately felt a pinch when the market seemed to lean towards the prospect of further monetary restraint to curb increasingly aggressive price increases.
According to Bloomberg, traders were now pricing three 50-point US Federal Reserve rate hikes in June, July and September, respectively.
US hotter than expected #inflation increases the possibility of further Fed increases. The trader now prices in 3 half-point interest rate increases and and two small steps in addition. Almost 3% of the policy rate is now priced at the end of the year. image.twitter.com/RYUPgK1qbt
– Holger Zschaepitz (@Schuldensuehner) June 10, 2022
Bitcoin traders reacted by seeing how various points within the current narrow trading range would fare if fluctuations continued. For Michaël van de Poppe, who has presented the Coinelegraph, the key area was about $ 29,300.
“Let’s see how Bitcoin responds at this level of support,” he said said Twitter followers after the CPI event.
“If we fall down, it’s going to be painful.
At the same time, a popular WhalePanda commentator warned desperate investors not to reconsider their BTC allocation due to macroeconomic conditions.
“Throwing away your Bitcoin because inflation is higher than expected is one of the stupidest things you could do,” he said. wrote.
The United States announced a quarterly adjusted non-adjusted CPI in May of 8.6%, the highest level since December 1981. Bitcoin fell below $ 30,000 after a higher-than-expected issuance. https://t.co/WkNaJLclsx
– Wu Blockchain (@WuBlockchain) June 10, 2022
On the other hand, the Russian ruble rose by 5% on the day the country’s central bank adopted a reverse policy with the central bank, lowering the policy rate to a level not seen since before the war with Ukraine.
Commenting on social media, Anthony Pompliano, founder of Morgan Creek Digital, said: described US monetary policy later referred to as “undead” to call inflation “national crisis”.
“The last time inflation was so high in America, they literally changed the CPI methodology,” he said. added.
The US dollar is growing in further pain for cryptocurrencies
One asset that did not suffer from the CPI at all, meanwhile, was the US dollar.
Related: $ 30K BTC price has “serious impact” on Bitcoin mining profits – analysis
The latest data from the US Dollar Index (DXY), which measures the strength of the US dollar against a basket of corporate currencies, showed a sharp decline in previous declines, as inflation rose only during its career.
The result was probably a further headwind for both Bitcoin and risky assets elsewhere before the opening of US equities.
At the time of writing, DXY was at 103.9 points, once again blocking what was 20-year maximum 105 seen last month.
The views and opinions expressed herein are those of the authors only and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading business involves risk, you should conduct your own research when making a decision.
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