Bitcoin (BTC) fell sharply on June 10 after the market was stirred by surprisingly high inflation data from the United States ahead of Wall Street’s opening.
Trader: Bitcoin Will Be “Painful” If $29,300 Fails To Hold
Data from Cointelegraph Markets Pro and TradingView showed a $600 dive for BTC/USD as May hit consumer price index (CPI) data.
Despite expectations that the worst period of inflation was over, May’s CPI print came in at 1% month-on-month and 8.6% year-on-year – a return to levels not seen since 1981. Estimates had projected only half as much bounce for the previous month.
Bitcoin immediately felt the pinch as the market increasingly leaned on the prospect of further monetary tightening to cushion aggressive price increases.
According to Bloomberg, traders were now asking the US Federal Reserve to hike three 50-basis-point key interest rates in June, July and September, respectively.
US hotter than expected #inflation Increases the chances of more Fed hikes. Traders now take 3 half-point rate hikes and prices in two more short steps. It is now priced at a year-end prime interest rate of around 3%. pic.twitter.com/RYUPgK1qbt— Holger Zaschaepitz (@Schuldensuehner) 10 June 2022
Reacting, bitcoin traders were eager to see how the various points inside the current narrow trading range would continue to fluctuate. For Cointelegraph contributor Michael van de Pope, the key zone was around $29,300.
“Let’s see how bitcoin is reacting to this level of support,” he said. Told Twitter followers after the CPI event.
“If we fall down, it will be painful.”
Meanwhile, popular commentator whalepanda cautioned investors to reconsider their BTC allocation due to macro conditions.
“Dumping your bitcoins because inflation is higher than expected is one of the most polite things you can ever do,” he said. wrote,
The US announced that the unadjusted CPI annualized rate in May was 8.6%, the highest since December 1981. Bitcoin fell below $30,000 after the release of a higher-than-expected US CPI. https://t.co/WkNaJLclsx— Wu Blockchain (@WuBlockchain) 10 June 2022
In contrast, the Russian ruble rose 5% on that day as the country’s central bank adopted the opposite trajectory of the Fed, cutting rates not seen since the start of the war with Ukraine.
“The last time inflation was so high in the US, they literally changed the methodology of the CPI,” he said. couple,
US Dollar Rebounds in More Pain for Crypto
Meanwhile, one asset that did not suffer from the CPI at all was the US dollar.
RELATED: $30K BTC Price Has ‘Serious Impact’ on Bitcoin Miner’s Profits – Analysis
The latest data from the US Dollar Index (CPI), which measures the strength of the USD against a basket of trading partner currencies, has sharply reversed a previous downtrend, with inflation only adding to its trajectory.
The result was the potential for another headwind for both bitcoin and the riskier asset, ahead of the opening of US equities more broadly ahead.
At the time of writing, the DXY was at 103.9 points, closing once again at the 20-year high of 105 seen last month.
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