Is There Any Chance of a Short-Term Recovery After Drop in Prices?
Following a hotter than expected CPI report, BTC, ETH, altcoins and stock prices all dropped. Is there any chance of a short-term recovery?
The stock market is feeling the pain after the recent inflation report. The report showed that headline inflation rose by 0.1% month over month, which was unexpected. This is bad news for the stock market, as it means that prices are rising faster than anticipated.
Despite falling gas prices and a cooling housing market, core inflation rose 0.6% month over month and is now at 8.3% year over year. This suggests that inflationary pressures are still present in the economy and that the Federal Reserve will need to maintain its current monetary policy stance in order to keep inflation in check.
This chart from @TheTerminal shows why this #CPI number is so disappointing. The contribution of energy has declined, as expected; but services inflation is now rising sharply. Not what the #FOMC will have wanted to see. pic.twitter.com/BsfwFsuyD5
— John Authers (@johnauthers) September 13, 2022
It seems that crypto traders were caught off guard by the Fed's interest rate hike announcement yesterday. Even though the market had supposedly "priced in" a 0.75 bps hike, Bitcoin, Ethereum and select altcoins still fell in value. This just goes to show that the crypto markets are still very volatile and unpredictable. Who knows where prices will go next?
Looking back on the year that was, it's safe to say that things didn't quite go as planned. 2020 was supposed to be a year of growth and progress, but instead it turned out to be a year
Perma-bull Fed pivot CPI traders REKT. LOL
— Big Smokey (@big_smokey1) September 13, 2022
The recent sell-off in the stock market has been a major blow to the crypto market, with Bitcoin and Ethereum both seeing significant losses. However, with just one day left before the highly anticipated Merge fork, many investors are still holding out hope that the event will boost prices and revive the market.
It looks like Bitcoin is continuing its upward trend, with prices reaching as high as $22,800 in the past few days. However, some analysts are cautioning that BTC is also trading near a key overhead resistance, so it remains to be seen how long this rally will last.
It is clear that BTC's all-time high is no longer acting as a resistance for the market, as price has crumbled below this key level. This is likely due to the negative news surrounding the monthly CPI data, which has caused many investors to lose confidence in BTC. However, it is important to note that the market has been in a "bear flag continuation" trend since November 10th, 2021, which means that there is still potential for further downside.
It is likely that Bitcoin will continue to fall in value, unless there is a major event that causes a sudden surge in price.
There's nothing particularly exciting happening with Bitcoin at the moment, as the price continues to chop around in its 90-day range between $25,400 and $17,600. However, a break below $18,500 or the yearly-low at $17,600 could signal some interesting changes in the near future.
