Following the release of unfavourable inflation data, leading virtual currencies were bleeding, with investors bracing themselves for the worst.
The price of Bitcoin (BTC) and Ethereum (ETH) dropped to the red zone as the US Bureau of Labour Statistics released the Consumer Price Index (CPI) for September. The data is at 8.2% for the September record.
Core US inflation reaches 40 year high
A measure of the US CPI in September indicated the value had reached a 40-year high. The core CPI, which excludes food and energy, surged by 6.6% over the past year. It marks the peak mark since 1982.
In addition, the core CPI increased by 0.6% for the following month. Hence, the overall CPI surged by 0.4% in September to hit the high value of 8.2% year-to-year.
In August, the CPI data rose to 8.3%. In June, the annual CPI peaked at 9.1%, the highest value since November 1981.
The released data increases pressure on the Federal Reserve to spike interest rates.Hence, there’s the possibility of getting another 75-basis points interest rate increase by November. The Fed has already implemented such a spike in rates three times in the year.
The crypto market was red as most crypto assets lost value within the week. Prices are going to the south drastically with little or no restriction for the tokens.
Bitcoin has seen a case of constant fluctuation.BTC which was trading above the $19,000 mark in the early hours of the day before the release of the Index had its price drop by 3.7% to trade at $18,350. The brief sell-off made the leading cryptocurrency by market cap trade below the $19,000 mark for the first time since September 22.
BTCUSDT on Tradingview.com
At the time of writing, Bitcoin has shown a slight move in recovery. The token is trading at around $19,131.69, indicating an increase over the past 24 hours. Its dominance over altcoins is at 40.19%.
Ethereum was not left out of the price fall as it dropped over 8%, trading at $1,285 with the release of the Index. Although the price of BTC seems to be making a recovery at the time of writing, other coins are still bleeding.
The sell-off after the release of the inflation data shows that BTC and other virtual assets are still trading in line with stocks, contrary to signals of BTC’sdetachmentfrom the stock market. The pair has moved unanimously for most of the year, although BTC was relatively stable, unlike stocks before the data release.
The similarity of trading patterns of both markets is due to the massive investment of institutional players in the digital asset market.
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