Crypto market jitters around inflation expand with Bitcoin and Ethereum dropping to levels not seen since last week.
Bitcoin (BTC) carried through threats of new local lows on July 12 as the White House warned of “highly elevated” inflation.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
White House warns ahead of “decisive day”
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD approaching $19,500 prior to the Wall Street open, down over 4% on the day.
Having failed to hold $20,300 support, the pair appeared to react badly to comments on the inflation outlook from White House press secretary Karine Jean-Pierre.
Markets were already primed for higher than expected figures for June from the Consumer Price Index (CPI), which made new forty-year highs in May.
“So on Wednesday, we will have new CPI inflation data, and we expect the headline number, which includes gas and food, to be highly elevated, mainly because gas prices were so elevated in June,” she told reporters at a press briefing July 11.
The trip to $19,520 meanwhile marked Bitcoin’s lowest levels in a week.
“Tomorrow is going to be decisive,” Cointelegraph contributor Michaël van de Poppe told Twitter followers.
He added that the worst of the reaction should come before the CPI data release, but that the U.S. dollar index (DXY), itself at its highest in two decades, remained a source of interest.
“Honestly saying, “sell the rumor, buy the news” seems to be an implication,” the tweet continued.
“Charts to watch tomorrow: $DXY and the yields on the government bonds + reaction on Brent oil.”
Particularly high inflation risks losses across risk assets due to the associated risk of central bank monetary tightening to tame it, as is already being seen in the U.S. DXY, as Cointelegraph reported, often makes decisive moves upward in times of financial weakness.
Psst… the dollar $DXY is telling us that inflation hasn’t peaked.
— Caleb Franzen (@CalebFranzen) July 11, 2022
DXY stood at 108.47 at the time of writing, having spiked higher into the new week to reach its strongest levels since October 2002.
U.S. dollar Index (DXY) 1-month candle chart. Source: TradingView
“Not interested into longs going into CPI tomorrow, personally looking at a regain of $20.3K and/or $19.3–19.5K region,” Van de Poppe added about potential plans to trade the upcoming turbulence.
Ethereum price sheds 8%
On altcoins, daily losses trended over 5%, but the top ten cryptocurrencies by market cap were led by Ether (ETH), down 8% in 24 hours.
Related: Price analysis 7/11: BTC, ETH, BNB, XRP, ADA, SOL, DOGE, DOT, SHIB, AVAX
ETH/USD traded at $1,060 at the time of writing, approaching daily support levels in place since mid-June
“If things stay the same and Altcoins continue to struggle to breach key resistances… Altcoins may need to experience at least an extra -30% of downside,” popular trader and analyst Rekt Capital commented at the start of the week.
ETH/USD 1-day candle chart (Bitstamp). Source: TradingView
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