Rising inflation numbers have been well complemented by rising interest rate announcements by most central banks around the world. The hawkish stance of most governments has proven to be burdensome for consumers.
The US Bureau of Labor Statistics just released its Consumer Price Index numbers. Inflation for September dropped to 8.2%, the lowest since February this year.
The released numbers will by and large dictate the US Fed’s actions on sticking to aggressive monetary tightening during its upcoming meeting at the beginning of November. Experts believe the central bank will implement another 75 basis point rate hike in the next meeting.
The minutes of the latest meeting released a day back noted,
“Several participants noted that, particularly in the current highly uncertain global economic and financial environment, it would be important to calibrate the pace of further policy tightening with the aim of mitigating the risk of significant adverse effects on the economic outlook.”
Impact on the market: Pre-mature Bitcoin sell-off?
Right before the CPI release, Bitcoin had slipped below $19k. With fears “going through the roof,” crypto analyst Michaël van de Poppe highlighted that the markets were “selling off.” He also claimed that this may be the “most hyped data point” of the year.
Post every release, Bitcoin’s price has fluctuated in the short term. In most instances when the CPI came in higher than expected, BTC has fallen an average of 4% in the 30 minutes following the release. On the other hand, whenever the number has been lower than the consensus, the asset has gained an average of 2%.
As illustrated below, there are a handful of support levels around the current price that can come to the rescue of the largest crypto asset.
On the flip side, if the community reacts optimistically, and equities rise simultaneously, then re-claiming the $19k level will be the first challenge on the upside for Bitcoin. From there on, it can cling onto its MAs in the short time frame and start inclining towards $20k.