Hot CPI report puts a dent in Bitcoin and Ethereum rally, stocks also lose ground

After the September 13th inflation report published an unexpectedly high figure showing headline inflation increasing by 0.1% month over month, crypto and stock markets are reeling.

Even though gas prices fell to multi-month lows, and there was a cooling housing market core inflation saw a 0.6% bump month-over-month and 8.3% year-to-year increase.

This chart by @TheTerminal illustrates why the #CPI number is so disappointing. As expected, the contribution of energy declined. However, services inflation is on the rise. This is not what the #FOMC would have liked to see.
— John Authers (@johnauthers), September 13, 2022

Market participants and investors had predicted that the Federal Reserve would raise interest rates by 0.75 basis points. However, many believed that September 13’s CPI report would be weaker than expected.

Crypto traders anticipated Bitcoin (BTC), Ether(ETH) and other altcoins to rise in value given that the market had “priced in a” 0.75 bps increase.

Evidently, the exact opposite happened.

Perma-bull Fed pivot CPI trader REKT. LOL
— Big Smokey (@big_smokey1) September 13, 20,22

The Dow lost 2.6% while the S&P 500 fell 2.9% and 3.6% respectively. Risky assets fell as well. Bitcoin lost more than half of its weekend gains, with a 9% pullback reaching $20,350. The Merge is just a day away and Ether has pulled back 7.29% at $1,590. Most cryptocurrencies in the top 100 are suffering single- to double-digit losses.

Although Bitcoin’s weekend rally began Sept. 9, and pushed the price as high as $22,800 at the beginning of this week, earlier analysis indicated that BTC was trading close to a key overhead resistance.

The multi-month resistance to Bitcoin’s record high price held even though the price fell to $22,400 at market opening and CPI data reached media outlets. This analysis also revealed the “successful bear flag continuation” trend since Bitcoin’s November 10, 2021 price peak of $69,000.

BTC/USDT 1-day chart. Source: TradingView

The most likely direction for Bitcoin is still the downside, unless there is an exceptionally bullish Merge event.

One positive thing to remember is that Bitcoin prices continue to fluctuate in the 90-day range (pinkbox) between $25,000.400 and $17,000. My vantage point is that there’s “nothing here” until the price drops below $18,500, or the annual low of $17,600.

com. You should do your research before making any investment or trading decision.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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