Bitcoin drops to support as looming CPI print shakes up crypto and stock markets.

As this week’s CPI number approaches, traders tuck their tails, and BTC and ETH prices fall back into range to test underlying support.

The cryptocurrency and equity markets fell on August 9 as traders were nervous ahead of tomorrow’s Consumer Price Index (CPI) announcement. The print’s specifics will provide insight on whether the Federal Reserve’s aggressive interest rate rises are helpful in taming runaway inflation, and it may influence the magnitude of future hikes.

Earlier this week, Tesla CEO Elon Musk predicted that July statistics would show the US approaching peak inflation and that any recession would be “light to moderate.” The current opinion is that July statistics will be lower than June’s record-breaking 9.1% number. The price of energy commodities (oil and natural gas) fell considerably in July, and the Fed is hoping that the prior back-to-back 0.75 basis-point rises will offset rising costs in other sections of the economy.

As is customary, Bitcoin (BTC), Ethereum (ETH), and the majority of cryptocurrencies fell as traders de-risked ahead of the CPI report. BTC fell as low as $22,800, while Ether recovered to $1,670. The argument for traders hiding in stablecoins is sound, but from a technical standpoint, the Aug. 9 decline is merely a lower support test following the previous week’s support-resistance flip, while large-cap assets like ETH and BTC continue to move inside multi-week ranges.

Traders seek refuge till the CPI is published.
The concern around the August 10 CPI is “unwarranted,” according to independent market expert Michael van de Poppe, and after the sequence of retests is through, BTC price could rise toward $28,000.

Trader @52kskew added to the narrative that the recent downturn is “anticipated,” claiming that BTC’s price movement is being influenced by a “strong unwinding in perps” as spot Bitcoin is sold at a “logical resistance.”

Big Smokey, a fictitious trader, claimed that the market-wide slump is merely “de-risking by traders anticipating this week’s CPI number.”

According to Big Smokey, traders are “interpreting recent Fed remarks + post CPI print market reaction” as dovish, and if this pattern continues, the market might rally if inflation data are lower than in June.

Analyst Dylan LeClair, on the other hand, thinks that stocks are in the “late stages of an equities bear market rebound,” and that BTC will sweep swing lows within the next six to twelve months if a “correlation 1.0 event” happens.

The overall cryptocurrency market capitalisation is currently $1.09 trillion, with Bitcoin dominating at 40.5%.

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