Bitcoin fell further after Wall Street opened on September 13 as the dust settled due to unexpectedly high inflation in the US.
Hourly candlestick chart BTC/USD (Bitstamp). Source: Trading View
BTC price is losing 9% on the day
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD lost $21,000, down 8.45% on the day.
The bearish trends emerged after the US Consumer Price Index (CPI) for August was 0.2% higher than expected.
This, in turn, increased the likelihood of the Federal Reserve raising interest rates by 75 or 100 basis points next week, adding to the pressure on already risky asset markets.
Fed Rate Target Prospect Chart for September 13, 2022 Source: CME Group
Bitcoin proved particularly sensitive to this event, however its decline was affected by the expected support at $20,800.
BTC/USD also managed to overcome the recent futures gap that formed over the weekend, which ranged from $21,300 to $21,500.
Popular Crypto trader Ed, who predicted both levels, confirmed in a tweet after the CPI release: “BTC just broke the previous swing low I noticed yesterday and today.”
US stocks face similar challenges, with the S&P 500 down 3% and the Nasdaq Composite down 4% at the time of writing.
For Joren Timmer, global macroeconomics director at Fidelity Investments, an asset manager, there was no reason to believe that the renaissance of risky assets would come until the Fed completely stopped raising interest rates.
Look at the 1994 cycle to understand the current cycle: values are unlikely to rise until the Fed finishes tightening and two-year yields begin to fall. pic.twitter.com/xk6DDYLdzp
— Yurien Timmer (@TimmerFidelity) September 13, 2022
Currency flow hits 10-week high
Meanwhile, volatility has seen the most BTC liquidations in the week, totaling $45 million as of September 13 at the time of writing.
Related: Fed, Merger and $22,000 Bitcoin – 5 Things to Know About Bitcoin This Week
According to data from blockchain monitoring resource Coinglass, the total liquidation of long positions in the cryptocurrency was significantly higher at $168 million.
Cryptocurrency filter table. Source: Coinglass
Meanwhile, analyst platform CryptoQuant recorded same-day inflow that already reached its highest level since July 1 at 84,000 bitcoins.