By Mark Ackman
The stock and cryptocurrency markets are currently under a lot of pressure as there are fears of great losses ahead. This is because of the recently shared Consumer Price Index (CPI) data that has been shared in the United States.
CPI Data is Hot
The inflation report has been shared on September 13 and it is carrying unexpectedly hot figures, a not-so-good sign for the investors.
The report has shown that headline inflation has risen by 0.1% in August. The rise recorded is compared to the month of July 2022.
Even the economists were taken by a huge surprise as they were all very hopeful that the CPI data would be promising.
This was because of multiple factors that the economists hoped the inflation rate would lower. The housing market was showing signs of cooling while the gas prices had also moved down to multi-month lows.
Still, these were not enough to stop the core inflation from rising, as it recorded a 0.6% bump on a month-over-month basis. On the other hand, the year-over-year inflation rate for the country sits at 8.3%.
Market Participant and Investor Expectations
Like the rest of the population, the investors and participants were also expecting a relaxation in the CPI data. It was expected that the 0.75 bps hikes in the interest rates implemented by the Federal Reserve would help the economy bring in soft outcomes.
Based on the above, the investors had invested in Bitcoin (BTC) and Ether (ETH) hoping to see significant surges in the values of these tokens.
Due to the unexpected CPI data, the stock markets have also taken a huge hit. The Dow Jones, S&P 500, and NASDAQ Composite indexes have recorded 2.6%, 2.9%, and 3.6% dips in the latest trading sessions.
Bitcoin Price Pulled 9%
Right after the announcement, the investors were quick to withdraw their investments from Bitcoin. This created a huge dip for Bitcoin as its price fell by 9% hours after the CPI report was shared.
Due to the fall, Bitcoin ended up losing 50% of the gains it had generated since the weekend. At the time of writing, Bitcoin trades at a low of $20,350.
On the weekend, Bitcoin recorded a significant surge, which managed to push its price up to $22,800. According to the analysts, Bitcoin was close to hitting a key resistance mark.
Despite the recent drop, there is hope for Bitcoin that it may reemerge soon. This is because the trading price of Bitcoin is still hovering within the 90-day ranges which are $25.4k and $17.6k.
If the price of Bitcoin remains within the particular range, then it will resurge and if it falls below $17,600, then the situation would become alarming.