Cryptocurrency and stock markets are in pain after unexpectedly warm numbers were released in the September 13 inflation report which showed headline inflation rising 0.1% on a monthly basis.
Even as gas prices fell to multi-month lows and the housing market slumped, core inflation rose 0.6% month over month, with an annual inflation rate of 8.3%.
While market participants and investors estimated the upcoming Fed rate hike at a solid 0.75 basis points, many also agreed with the vague assumption that the September 13 CPI report will be weaker than expected.
With the so-called “pricing” market gaining 0.75 basis points, cryptocurrency traders predicted Bitcoin
Well, apparently the exact opposite happened.
The Dow Jones fell about 2.6%, while the S&P 500 and Nasdaq were down 2.9% and 3.6%, respectively. Of course, risky assets also declined and Bitcoin lost more than 50% of its recent full gains with a 9% drop to $20,350. With only a day left before the rally, the price of Ether is also down 7.29% to $1,590, with most cryptocurrencies in the top 100 currently suffering single to double digit losses.
While Bitcoin’s rally into the weekend of September 9 continued into the first part of this week, with the price jumping to $22,800, previous analysis warned that BTC is also trading near a major upper resistance level.
As seen below, several months of resistance held from an all-time high for BTC as the price fell to $22,400 as the market opened and monthly CPI data was released to the media. The analysis also revealed a “bear flag continuation” trend that has been in place since Bitcoin peaked at $69,000 on November 10, 2021.
BTC/USDT 1-day chart. Source: Trading View
Barring a very bullish consolidation event, the most likely direction for bitcoin is still down.
On a positive note, despite the September 13 correction, bitcoin price continues to swing within the 90-day (pink box) range between $25,400 and $17,600. In my view, there is “nothing to look at” until the price drops below $18,500 or the yearly low of $17,600.